Bulgaria Hopes to Find Investor for Stock Exchange by End-2011

Finance | March 17, 2011, Thursday // 16:39|  views

Finance Minister Simeon Djankov (R) gave on January 6 the go-ahead to the sale of Bulgaria’s stock exchange shares, half a month after the regulator approved its prospectus, making it a public company. Photo by BGNES

Bulgaria's stock exchange, which launched the sale of its shares in January, is hopeful that it will attract a key European investor for its majority stake by the end of the year.

"Bulgaria's stock exchange has high chances of attracting a strategic investor, who is one of the big names on the European capital market," Assen Yagodin, president of the bourse's Board of Directors, told journalists on Thursday.

He refused to disclose names and clarified that potential bidders will hold negotiations with the Finance Ministry, which owns the majority stake.

"We strongly believe that international investors have already shown interest," Yagodin stressed and cited Finance Minister Simeon Djankov, who claimed that the sale of the state-owned stake in the bourse will be wrapped up by the end of the year.

A few months ago Ivan Takev, executive director of the stock exchange, admitted that the increase of the Bulgarian government's share and its self-listing will lead to the sale of its majority stake to an industry investor in a bid to boost liquidity, restore market growth and investor confidence.

The next step, to be made in the short term, will be for major state-owned companies to be listed on the bourse.

Bulgaria's only stock exchange became a public company in the middle of December last year after the Financial Supervision Commission approved its prospectus and the bourse was listed on its own platform. The capital of the bourse is a total of BGN 6 582 860 at BGN 1 apiece.

Bulgaria's Finance Ministry raised at the beginning of October its share to 50% plus one share from 44% in the country's stock exchange. The government bought 715,000 shares at BN 1 apiece. The bourse will sell the remaining 50% held by private investors including brokerages and banks.

The shareholders said the move aims to ease the future privatisation of the exchange and the search for a strategic investor.

Since 2008, the stock exchange has traded on the Deutsche Boerse's Xetra platform under a contract that expires in 2012. Bulgaria has discussed ways to sell its bourse stake over the past decade with Sweden's OMX AG and exchanges in Austria, Greece and Poland to boost interest in local stocks and make trading more transparent.

Representatives of the Finance Ministry and the Stock Exchange have commented that the move will give the ministry the opportunity to seek a strategic investor, make the Exchange transparent, increase interest towards the capital market and reinstate the trust in the latter.

Meanwhile Victor Papazov, founder, former CEO and chairman of the Bulgarian Stock Exchange has harshly criticized the decision, saying the Bulgarian government is threatening the country's economic future by effectively nationalizing its stock exchange at a knock-down price.

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Tags: Assen, Bulgaria, stock exchange, Finance Ministry, Bulgarian Stock Exchange, Victor Papazov, Financial Supervision Commission, finance minister, Simeon Djankov, Ivan Takev, Yagodin

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