Industrial Holding Bulgaria will issue bonds for BGN 50m (20.02.2015)


The proceeds would be used to pay out old liabilities and for new investments.

Industrial holding Bulgaria will issue new bonds valued at BGN 50m, said the manager of the issue – Investment Bank Mane Capital. The prospectus is approved by the Financial Supervision Commission and will be published in several days. The holding would use one part of the funds to refinance old debt and the other to cover already made investments into subsidiaries.

Something new, something old

From the available information it becomes clear that BGN 30m of the new issue would be used for the payout of the previous bond issue. The rest would be used to refinance investments in KP3 Port Burgas, as well as other projects undertaken by the holding and its subsidiaries. This became clear from the protocol of the General Shareholders Meeting which took place last December and during which the new bonds issue was approved. There is no more information on the usage of the funds so far. Officials from Industrial Holding Bulgaria said that they cannot comment before the official publication of the project. In it, people would be able to find thorough information on the usage of the funds.

Throughout the years, bond issuing has remained a preferred method for financing for the holding. The previous bonds issue is currently being traded on the Bulgarian stock exchange. It matures this year and the new bonds issue would be used to cover it. The principal amount is BGN 30m, which is the minimum amount needed for the new issue to be considered successful. This means that Industrial holding Bulgaria will either raise the money needed for covering the previous bonds or it would seek different methods for financing.

The new bonds are forecasted to have a maturity period of 3 years with 5% annual interest, paid semi-annually. The bonds will, under specific circumstances, be convertible with an option for advanced repayment. They would be freely traded on the Bulgarian Stock Exchange. The exact parameters of the issue will be disclosed in the prospectus.

Marine Business

The group Industrial Holding Bulgaria operates in several industries, which could use the new funds. The marine transportation segment represents the largest portion of the holding’s assets, followed by mechanics, marine and shipbuilding. KP3 Port Burgas is part of the marine sector and it can be seen that the holding executed a huge expansion project. It consists of independent zones including open and closed warehouses, two new ship places, silo grain warehouse with a 44,000tons capacity, load/unload premises as well as improved infrastructure.

Amongst the other more important companies of Industrial Holding Bulgaria is “Bulqrd” in the shipbuilding industry, which holds the assets of the old Varna Shipyard, the mechanics ZMM Sliven, ZMM Nova Zagora and the transport company Private Engineering. During the last several months, new investments were made into ZMM Sliven and ZMM Nova Zagora. The two industrial companies usually finance themselves through Euro Funds.

Industrial Holding Bulgaria made BGN 70.26m of gross revenue for 3rd quarter, which is a decrease of 28% compared to last year. The holding made a net loss of BGN 1.4m without minority interest. The holding has not yet published a consolidated report for 2014.


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