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Tsvetkova Bebov Komarevski and Boyanov & Co. Advise on Biggest Ever Bond Sale in Bulgaria

Tsvetkova Bebov Komarevski and Boyanov & Co. Advise on Biggest Ever Bond Sale in Bulgaria

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Tsvetkova Bebov Komarevski has advised Bulgarian electricity power distributor Energo-Pro Varna EAD on its issuance of seven-year bonds with a yield of 3.5% p.a. on the Bulgarian market in a total volume of EUR 130 million, which represents the biggest ever bond sale in Bulgaria. The Balkan Advisory Company IP, which was sole lead manager on the deal — and which was advised by Boyanov & Co. — reports that the bonds were placed among institutional investors from Bulgaria, Austria, Central and Southeastern Europe. The bondholders trustee, United Bulgarian Bank, was advised by its in-house legal team. 

Energo-Pro Varna, one of the three energy distribution companies in Bulgaria, is a subsidiary of Energo-Pro A.S., Czech Republic, an integrated energy company with a long history in private electricity distribution, power supply, and generation of electricity from renewable energy sources. Energo-Pro Varna is engaged in distribution, end-supply and free market electricity trading. It is the sole license holder for distribution and end-supply (regulated) in northeastern Bulgaria and is a leading free market supplier (non-regulated) in Bulgaria. The company will use the proceeds to invest in its distribution network, as well as for repayment of its outstanding indebtedness.

The Black Sea Trade and Development Bank (BSTDB) — an international financial institution established by Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, and Ukraine, and headquartered in Thessaloniki, Greece — invested EUR 40 million in the debut bond issue. This subscription marks the first time BSTDB has acted as an anchor investor on a primary bond issue. 

"Energo-Pro Varna is particularly pleased to have BSTDB as an anchor investor alongside other international and local commercial banks, pension funds, asset managers and corporate treasuries,"  said Momchil Andreev, Chief Executive Officer of Energo-Pro Varna Momchil Andreev. "The terms and size of the issue, which is by far the largest for the Bulgarian market, provide solid footing for our medium term investment plans."

According to Tsvetkova Bebov Komarevski (TBK), the firm advised Energo-Pro on "the entire process and documentation — starting with [its] transformation to a joint-stock company, working on the concept of the issue, including the vast majority of the terms and conditions, organizing the offering circular drafting, negotiating with the bondholders trustee, coordinating the security package negotiation, and assisting the issuer and the lead manager with the subscription process.” In addition, the firm reports, "we procured the registration of the issuer with the Central Depository (the central securities depository) and, after the issuance, the post-issuance matters, such as getting the security package signed and perfected."

The TBK team, overseen by Partner Nikolay Bebov and led by Senior Associate Damyan Leshev, included Senior Managing Associate Venelin Dimitrov and Managing Associate Angel Bangachev. According to Bebov, "the bond issue is a private placement transaction, but it is intended that the bonds will be listed on the Bulgarian Stock Exchange [in] Sofia within the next several months. This is why the full list of details of the bonds is not in the public domain at present; it will be after the listing."

The Boyanov team consisted of Partner Damian Simeonov and Senior Associate Georgi Drenski.

Bulgaria Knowledge Partner

Schoenherr is a leading full-service law firm providing local and international companies stellar advice that is straight to the point. With 15 offices and 4 country desks Schoenherr has a firm footprint in Central and Eastern Europe. Our lawyers are recognised leaders in their specialised areas and have a track record of getting deals done with a can-do, solution-oriented approach. Quality, flexibility, innovation and practical problem-solving in complex commercial mandates are at the core of our philosophy.

Firm's website: www.schoenherr.eu

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