The financial expert and former chairman of the Board of Directors of “Toplofikatsia – Sofia” Georgi Kadiev said he had the feeling that the company was deliberately being allowed to go bankrupt so that it could be sold. He made the comment on the BNR programme “Before Everyone Else”.
“I have the feeling that they deliberately want to bankrupt “Toplofikatsia – Sofia”.”According to him, the debt of Sofia’s district heating company has already reached €1.2 billion. Kadiev compared the amount with the company’s liabilities in 2009, when he headed its board and they amounted to 100 million leva.
According to the financial expert, the main reason for the accumulation of debt is the way prices are determined. “Toplofikatsia – Sofia” buys natural gas from “Bulgargaz” at a price that changes every month, while it sells thermal energy at a price fixed for one year. As a result, the company bears the difference when fuel costs rise.
Interest in individual assets
Kadiev believes it will be difficult to find a buyer for the entire company because of its accumulated debts and the investment needed in the network. According to him, there may be interest in individual assets, particularly the cogeneration facilities, where thermal and electric energy are produced simultaneously.
He outlined two possible scenarios if the current model is maintained. One is that, in several years, Sofia residents could be left without heating. The other is that “Toplofikatsia – Sofia” would continue to receive invoices from “Bulgargaz” without paying them, with the accumulated debt ultimately being covered by the state.
Gas is the main expense
According to Kadiev, natural gas accounts for around 70% of the company’s expenses. That is why he believes that restructuring alone will not solve the problem if the price of fuel remains high.
As possible measures, the financial expert pointed to using waste to produce energy at Sofia Thermal Power Plant, as well as negotiations with the European Commission for an exemption that would allow the company to receive Russian gas.
Meanwhile, the Engineering Infrastructure Committee of the Sofia Municipal Council is due to hear the management of “Toplofikatsia – Sofia” over the problems with heating and hot water in various parts of the city. The company’s financial condition is also expected to be discussed at the meeting.
Sources: novini.bg, dnes.dir.bg, bnrnews.bg