Bulgaria's Govt Wants to Raise BGN 450 M from Privatization in 2011

Industry | March 24, 2011, Thursday // 22:15|  views

Emil Karanikolov, head of the Agency for Privatization and Post-Privatization Control. Photo by Dnevnik

Bulgaria's center-right GERB party Cabinet plans to raise BGN 450 M from privatization of fully or partly state-owned companies in 2011, according to Emil Karanikolov, head of the Privatization Agency.

The companies on the table include a couple of "giants" – cigarette-maker Bulgartabac, Bulgaria's largest military plant VMZ Sopot, and construction company Technoexportstroy – as well as some smaller companies and state minority stakes in power utilities.

The government will most likely sell Bulgartabac through a tender, allowing no consortiums but only strategic and financial investors to participate, Karanikolov said on Darik Radio Thursday.

100% of VMZ Sopot, an arms producer employing 3 700, will be sold through a public tender as well; in both cases the government will emphasize social and investment requirements for preserving and expanding the traditional production and the jobs.

In the case of VMZ Sopot, the government will evaluate the bidders on a 100-point scale, awarding up to 60 points for the price offer, 30 points for the investment plan, and 10 points for social commitments. The head of Bulgaria's Agency for Privatization and Post-privatization Control is convinced that there will be eager investment interest in the factory.

The sale of VMZ Sopot was approved by the Parliament on Wednesday. The privatization of Bulgaria's state-owned construction company Technoexportstroy was also approved recently as the MPs voted to take it off the list of companies whose sale is prohibited.

According to Karanikolov, several other state-owned companies will be sold through the Bulgarian Stock Exchange – including "Duty-free Zone – Svilengrad" and the 33% minority stakes of the state in Bulgaria's three regional power utilities – E.ON, EVN, and CEZ.

He said that the government is almost ready with the procedure for the sale of the minority stake in E.ON.

The first privatization income for 2011 was registered just recently as the state sold its minority stake in Nestle Ice Cream Bulgaria through the stock exchange for BGN 2.5 M.

With respect to the recently failed sale of energy construction company "Montazhi", Karanikolov said there will be more investor interest in it when the larger energy projects start to kick in.

He further announced that in 2010 his institution raised BGN 27 M from post-privatization control – a record sum.

"We have never seen such results to date. The experts that we now have are great. We are about to review accepted investment programs, and will press charges where we need to," Karanikolov said.

He further announced that the government was going to file a suit with Viva Ventures, the buyer of the Bulgarian Telecommunications Company (BTC), now called Vivacom, for failing observe privatization commitments it made to the Ministry of Defense – unless Viva Ventures agrees to pay its dues within a 30-day notice.

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Tags: Emil Karanikolov, Privatization Agency, Agency for Post-Privatization control, Bulgartabac, VMZ Sopot, Technoexportstroy, power utilities, E.ON, CEZ, EVN, Duty-Free Zone Svilengrad, Montazhi, stock exchange, Sofia Stock Exchange, Bulgarian Stock Exchange


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