Bulgaria Consolidates State Minority Shares Prior to Sale

Business | April 23, 2010, Friday // 16:45|  views

Bulgaria's Economy Minister Traikov has asked his colleagues to review the list of companies the government is prohibited from privatizing. Photo by BGNES

Bulgaria's government has set up a “State Consolidation Company” (DKK EAD) in order to prepare the privatization of state-owned minority shares in 55 firms.

The State Consolidation Company was formally entered Friday into the Trade Register of Bulgaria's Registry Agency.

The company has been established in accordance with one of the 60 anti-crisis measures of the government adopted in early April which provides for the raising of cash for the state budget by selling state-owned minority shares of several dozen companies.

The government is hoping to raise about BGN 200 M from the sale of state-owned minority shares in various companies, which could be done through the Sofia Stock Exchange. The money raised will be a contribution to closing the BGN 1.5 B budget deficit that emerged in the first quarter of 2010. The total effect of the 60 anti-crisis measures - including raising cash and cutting expenses - is supposed to amount to BGN 1.6 B.

The Bulgarian government is going to unite its minority shares in the respective companies by making non-cash contributions to the DKK.

The new state company will work closely with the Agency for Privatization and Post-Privatization Control, and the Ministry of Economy, Energy, and Tourism.

The Ministry does not rule out the option of including companies that are 100% state-owned within the DKK.

In order to start the process of contributing state-owned company shares to the DKK, the Economy Ministry is preparing a special decision of the Council of Ministers, which is going to regulate the activities and functions of the Economy Minister and the other ministers who will be involved in this process.

Bulgaria's Economy Minister Traicho Traikov has sent a formal letter to his colleagues asking them to review quickly their lists of state-owned assets whose privatization had been prohibited in order to come up with a new list of the assets which can be sold.

The “prohibited list” of state companies that cannot be privatized is part of the Privatization and Post-Privatization Control Act, and can be change only with the approval of the Cabinet and the Parliament.

The “prohibited list” features strategically important companies such the National Electric Company NEK, the Kozloduy Nuclear Plant, the state railways BDZ, state hospitals, and other firms totaling over 100.

Most of them are 100% owned but there are also some of them who have state participation of over 50%.

Thus, it can be expected from the review requested by Minister Traikov that some of the companies with a state share of more than 50% can be among those consolidated within the DKK together with the minority-owned government shares in 55 firms.

According to Bulgaria's Registry Agency, the CEO of the State Consolidation Company is Krasimir Kozovski, Lachezar Borisov is the Chair of the Board of Directors, Maria Veselinova is his deputy, and Anita Velikova and Valentin Gruev are members of the Board.

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Tags: anti-crisis program, anti-crisis measures, prohibited list, privatization, Economy Ministry, Economy Minister, Traicho Traikov, Agency for Post-Privatization control, Privatization Agency, Krasimir Kozovski, DKK, minority share, State Consolidation Company


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