Банкеръ Weekly



Big privatisation in Bulgaria has come to a halt. There are several reasons for that, but the scheme of the divestment drama is one and the same - tender regulations resulting in the choice of one preditermined candidate, and negotiations in which it is the strong party. Afterwards, Themis intervenes in the deal and the chances for its successful finalization diminish. And while all activities of the Privatisation Agency (PA) are kept secret, the lobbying on the part of politicians and state officials are more than evident. The actions of our jurists - both higher magistrates and lawyers representing the nominated strategic investor - are quite predicatble. The consecutive attempt to sell the Bulgarian Telecommunications Company ((BTC) is an emblematic example. During the week the lawyers of the rejected candidate buyer Viva Ventures filed to the Supreme Administrative Court (SAC) multiple appeals. The magistrates honoured one of them and on Tuesday (May 27) initiated legal proceedings by which the deal on the telecom was at last suspended. This time the appeal was against decision No 2270-P of the PA's Executive Board of May 8 for launching negotiations with the consortium between Koc Holding and Turk Telecom. The decision sets a 50-day term for closing a contract for BTC's sale, obliges the new candidate buyer to extend by 90 days the validity of its offer for participation in the tender, and present a bank guarantee for EUR3MN. Moreover, the Turkish consortium is required to sumbit a declaration about the origin of its money within 20 days.The first lawsuit of the present BTC court cycle was initisated last week. Then the SAC scheduled its hearing for June 5, but it was against PA Supervisory Board's decision to reject Viva Ventures as the telecom's purchaser. The supreme magistrates rejected as groundless two more appeals by which the Austrian company's lawyers demanded certain documents from the PA. They concern decisions of PA's Supervisory Board, approving the sa;e of Technoimportexport, Ambalazh - Sofia, Portfleet - Bourgas, MTA EAD, and Roadproject, SAC specified. According to Viva Ventures' lawyers, these deals were approved on the basis of bilaterally signed preliminary contracts, and the PA's Supervisory Board had not demanded signatures under the annexes and respective agreements. Meanwhile, Reuters announced from Ankara that the consortium Koc Holding/Turk Telecom was ready to revise upwards the initially offered purchase price of EUR185MN for 65% of BTC's capital. Alluding to anonymous sources Bulgarian media prediced that the new purchase offer would be about EUR60MN higher than the initial one. According to Bulent Yaldarum, representative of Koc Holding in Sofia, the consortium's new offer was filed to the PA on May 23. However, the PA refused to comment, but it was inofficialy confirmed that a new offer was also filed by Viva Ventures, which would increase the purchase price to EUR210 if the court's ruling is in their favour. The PA announced officially that there would be no new negotiations by June 5, when the BTC lawsuit will be heard at the SAC. So, the timeout for BTC's sale is already a fact. Hard days have begun for politicians, lobbyists, and Bulgarian mass media. Some of the latter circulated information that the Turkish consortium had not presented the demanded declaration about the origin of its money, as it did not have sufficient financial resource to buy the BTC. And Reuters' announcement from Ankara was explained as an attempt to reply to those attacks.The non-confidence motion against the Premier Simeon Saxe-Coburg-Gotha, tabled on May 28 by the rightist opposition UDF, brought into the plenary hall the bargaining about the divestment of the Bulgarian telecom. Many MPs and observers are unanimous that BTC's sale to Koc Holding/Turk Telecom was the price for the 100% support for the Prime Minister on the part of NMSII's coalition partner MDF (the ethnic Turks' Movement for Rights and Freedoms). However, nobody raised anywhere the question about the conditions to be set to the new candidate buyer by the PA.

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