October 9, 2019 / 10:49 AM / 10 days ago

Eurohold hopes to acquire CEZ's Bulgarian assets by year-end

SOFIA, Oct 9 (Reuters) - Bulgaria’s Eurohold hopes to get all necessary approvals and close a 335 million euro ($368 million) deal to buy the Bulgarian assets of Czech utility CEZ by the end of the year, its chairman said on Wednesday.

Eurohold, active in insurance and asset management, agreed in June to acquire the assets, which include a power distributor that provides electricity to more than 2 million Bulgarians - making the deal politically sensitive. The deal is pending approvals from the Balkan country’s anti-monopoly commission, which started to look into the proposal last week, and its energy regulator.

“We expect the anti-monopoly regulator to approve the deal in the next 25 days. There are no whatsoever concentration concerns. The funds for the deal are also secured,” said Assen Christov, chairman of Eurohold’s supervisory board.

The company plans to fund the deal with a combination of equity and debt by two global banks. It has declined to name them but sources familiar with the process said Deutsche Bank and Nomura will arrange the financing.

The announcement of the deal prompted ratings agency Fitch to place Eurohold’s long-term issuer default B rating on negative watch due to an expected high proportion of debt as well as integration and execution risks.

On Wednesday, Eurohold said it has hired energy experts to ensure the smooth acquisition and management of the power distributor and said it plans to invest 270 million levs ($151.67 million) in it next year.

Eurohold’s debts stood at 174 million euros in the first half of the year and its total assets were 747 million euros, consolidated company data showed. Its revenues rose 30% on the year to 400 million euros for the period.

In April, Bulgaria’s financial regulator launched checks into Eurohold’s financial situation, pointing out that power distributors are part of critical infrastructure linked to national security. But it has not yet issued a conclusion.

Last week, CEZ said that if the deal with Eurohold fails to get the necessary approvals it would not make another attempt to sell its Bulgarian assets. ($1 = 0.9103 euros) (Reporting by Tsvetelia Tsolova; Editing by Kim Coghill)

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