Банкеръ Weekly

Briefs

BCC SETS IN MOTION PRIVATISATION OF DSK BANK

DSK BANK MAY BE SOLD BY END-FEBRUARY 2003, ACCORDING TO FOREIGN BANKS' REPRESENTATIVESThe Board of Directors (BoD) of the Bulgarian Consolidation Company (BCC) sifted out on July 11 the offers, filed by 17 candidate-consultants for the privatisation of DSK Bank, picking up five applicants: the Dutch bank ABN AMRO; SchroderSalomonSmithBarney (the investment division of the US finance giant CITIGROUP); JP Morgan (one of the top US investment banks), Austria's Creditanstalt Investment Bank, and Diva Securities (the London-based investment disvision of Japan's Diva Bank).On August 1 and 2 BCC's BoD listened to the several-hour presentations of the five candidate-consultants. The afternoon of August 1, devoted to the experts of ABN AMRO and SchroderSalomonSmithBarney, remained a secret to the mass media. The representatives of JP Morgan, Creditanstalt Investment Bank, and Diva Securities, expressed their views for DSK Bank's privatisation on August 2.The Finance Minister Milen Velchev, who is also Chairman of BCC's BoD, announced that no concrete parameters of the candidate-consultants' offers were discussed during the presentations. These details concern the payment of the consultants' teams costs which cannot be higher than EUR250,000 and the fee for the consultancy services - up to 1.8% of DSK Bank's assets. The latter is called a success fee and is due if the negotiated selling price of the Bulgarian financial institution exceeds 120% of the bank's net assets. According to Mr. Velchev, all these details shall be specified with the five candidate-consultants during future talks in mid-August.Exclusively for the BANKER weekly the Finance Minister explained that during the talks on August 1 and 2 the consultants presented their views regarding the term within which DSK Bank could be sold out and the methods for evaluating it. The foreign experts believe that if the privatisation procedure is speeded up, DSK Bank could be sold in January 2003, but end-February is the more realistic term. Two methods for evaluating the local financial institutions will be applied: the discount cash flows, and the ratio between negotiated prices and net assets when selling saving institutions and banks, specialized in offering services to the population, in other East European countries.

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