Without bankruptcies this year, the risk is for “Lukoil” if it stops the amount of crude oil to Bulgaria
In 2023, there will be no bankruptcies of large companies like in 2009, with the only company at risk being “Lukoil”, if the Kremlin decides to suspend the supply of crude oil to Bulgaria. The revision of the parameters in the Recovery and Resilience Plan is also inevitable. Europe and the US will categorically continue their support for Ukraine. This is what Prof. Krasen Stanchev, founder of IPI, said in the “Investor Club” on Bloomberg TV Bulgaria.
The decline in production will probably occur in the second quarter of this year, but Bulgaria has been one of the well-represented countries for the last year. Big companies are not expected to go bankrupt like in 2009. The current half of the decline continued with the bankruptcy of “Kremikovtsi” and there is no small part of the unpaid funds under state contracts. Nothing like that will happen this year because the capital expenditure money from the budget was not spent and is carried over to next year. Some level of investment is maintained, albeit with taxpayer funds.
The risk, which still exists, but is outside of Bulgaria, is for “Lukoil”, said Prof. Stanchev. “I don’t believe it will happen because it is quite stupid, but the moment the Kremlin decides to stop the amount of crude oil to unpleasant countries,” the company is threatened with bankruptcy because there will be no alternative supplier. It is possible to think like in April – “since Bulgaria is a relatively important customer, first deliveries to Bulgaria should be stopped”.
“The problem is that the tax footprint, the fiscal contribution of Lukoil Neftohim, without profit tax for the last 10 years, is BGN 1-1.2 billion, where the most important is VAT, as well as insurance and excise taxes, and to some extent the personal income of those working there. This is a big risk for the budget”.