Wholly state-owned Bulgarian Energy Holding (BEH) has selected a consortium of three financial institutions that will provide a bridge loan of up to €650mn, BEH said in a statement.

The deadline for raising the €650mn financing has been extended several times since mid-2015. Because of the delays, energy minister Temenuzhka Petkova sacked BEH CEO Jacklen Cohen on February 9.

The consortium includes the London branch of Italy’s Ваnса IMI S.p.A. (a subsidiary of Intesa Sanpaolo), the Luxembourg branch of Bank of China Limited, and J.P. Morgan Securities. The bridge loan will have a 12-month term and will be unsecured. It will be refinanced through a subsequent bond issue.

BEH also said that it reserves the right to invite the second-ranked consortium to negotiations at any time. According to Capital Daily, this tie-up is led by Citibank.

BEH will use the proceeds to settle payables owed by its subsidiary, Bulgaria’s public electricity supplier National Electricity Company (NEK), to two US-owned coal-fired power plants – AES Galabovo and Contour Global’s Maritsa East 3. These payables are reported to have reached a combined BGN1bn (€511mn). In turn, the power plants will use part of the proceeds to cover about BGN400mn in payables owed to state-owned coal miner Maritsa East Mines, also a BEH subsidiary.

In April 2015, NEK renegotiated its long-term power purchase agreements with AES and Contour Global on terms that were expected to save it some BGN100mn annually. However, a key condition for the deal to enter into force is that NEK repays its debts. According to the March 9 press release from BEH, this agreement is still valid, despite the delays.

According to Petkova, NEK reduced its loss to BGN220mn in 2015 from BGN586mn in 2014. In addition, the company is no longer accumulating a tariff deficit.

In 2013, BEH issued bonds worth €500mn and maturing in 2018.