Банкеръ Weekly



Ealing Studios Enterprises, New Image Bulgaria, Dragon International Studios Bulgaria Ltd, and Bavaria Film submitted preliminary offers to acquire 95% of the capital of Boyana Film EAD on November 15. These are the four companies which the Privatisation Agency (PA) certified for further participation in the competition on September 30.The PA is going to examine the preliminary offers and judge which of them can be allowed to enter the final stage of the procedure. The applicants admitted will be able to make due diligence of the Bulgarian cinema centre and prepare a binding offer. The terms will become known by the end of November. A representative of the PA press centre explained that the offered price is not going to be determining for the selection of the preliminary offers. More attention will be paid to the investment plans prepared by the companies, to the commitments they are ready to make, and to the evidence for films produced, the money planned for participation in the competition, etc. Whoever wins it will be allowed to pay in compensatory instruments 30% of the price.According to the Boyana Film Executive Director Evgeni Mihailov, it is delightful that the Bulgarian cinema studio has appeared so attractive. However, he is afraid that the case with Sofia Film may be repeated. Its buyer failed to fulfil even one of the commitments he took when signing the privatisation agreement. The conclusion is quite unpleasant. It turned out that the punitive payments imposed by the Post Privatisation Control Agency had not frightened anyone. Mr. Mihailov explained that it would be much wiser to have the buyer's obligations secured by the assets of the company in the privatisation document. He added that the future owner of Boyana Film should not be allowed to give orders about the utilisation of its ground for a certain period of time. The cinema centre owns 302 dka in one of Sofia's most expensive areas and that caused lots of discussions, worries, and accusations. Restitutional claims were also laid and the remaining 5% of the capital of the company is planned for their satisfaction.The winner in the competition will be required to keep the centre ground integrate. Besides, he will be obliged to keep its activity unchanged in the next ten years, to invest at least EUR6MN in a six-year period, and to produce no fewer than two full-length films and 20 minutes of cartoon films per year.Producers as well as servicing companies that meet a few requirements were allowed to take part in the competition for acquisition of Boyana Film. Film-makers must be able to provide money for full-length feature or at least cartoon films, for TV series, and also have at least five-year experience. They should have produced at least 50 productions with a total budget no lower than USD200MN. Moreover, the PA requires that the future owners of Boyana Film should have produced at least five films worth USD20MN in the past year. Applicants must also possess a film studio equipped with sets that occupy at least 2,000 square metres. They should also have film production revenues of at least USD60MN for the past three years.Companies that provide film services are required to offer camera equipment, operator lighting and sound-recording facilities as well as cinema laboratories. Applicants in this group should also possess specific equipment required for production of cartoon films. They must prove they have received at least USD45MN from their main activity in the past three years.The PA did not allow consortiums take part in the privatisation procedure. Consortiums may only be established after the winner is announced. However, one requirement is that the privatizer keep 75% of the company and leave the rest to an international financial institution such as the European Bank for Reconstruction and Development or other producers or suppliers of film-making services.Bavaria Film Managing Director Dieter Frank announced on a press conference held earlier in November that in case his company won the competition it would share the management of the studio with the Bulgarian Sia Advertising company in a 51:49 proportion. It is curious if there is a word about that intention in the indicative offer submitted to the PA.

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