Банкеръ Weekly

Briefs

BULGARIAN CAPITAL STEPS TIMIDLY ABROAD

Until recently, the late Iliya Pavlov has been the only Bulgarian who demonstrated ability to invest abroad. Last year that monopoly was ruined. In July, the owners of First Investment Bank (FIB), Tseko Minev and Ivailo Mutafchiev, bought MG's stake in Balkanska Banka - Skopje, and following the capital raise acquired 63% of the Macedonian bank. In October, Bulgaria's President Georgi Parvanov opened the first Bulgarian plant in Turkey built by the owners of Prista Oil. USD10MN have been invested in the oil producing company, based in the town of Izmit. Then several Bulgarian companies announced that they were investigating possibilities to invest in Russia. The plans of Stancho Kolev, owner of the Gabrovo-based chocolate producer of the same name, spread to Vietnam. And there are certainly other entrepreneurs who have made investments abroad without announcing them in public.The exact amount of the Bulgarian investments abroad is not known yet. Until 2000, when the Bulgarian National Bank (BNB) decided to give an answer to this question, the figure had frozen at about USD85MN. Most of it has been invested in tobacco plants and transport vehicles (in the foreign companies of Balkancar and Bulgartabac). Since then Bulgarian investments abroad have grown by USD98MN, but there is no information about the branches in which they have been put.For the first time BNB requested information about the Bulgarian investments outside the country with the latest amendments to the Currency Act which became valid from January 8, 2004. Therefore, in early February we'll finally learn what the real amount of the investments abroad is.Taking part in the privatisation process in neighbouring countries is another fashionable trend. According to the few data available, the former Multigroup holding has been its pioneer again. In 2000 it acquired the Bitola-based Sekerana sugar factory. It paid EUR1.2MN and planned to invest more. Until recently, taking this kind of risks on the Balkans was considered an exotic whim. But it turned out that the company once owned by Iliya Pavlov had not been the first to try its luck in neighbour countries' privatisation. In June 1999, a Russian-Bulgarian consortium led by the utterly unknown EP Commerce - Bourgas nearly won the auction for the Romanian chemical company Doljchim by offering to pay USD15.1MN. According to the Romanian press, the consortium included two famous companies - the Bulgarian Rosbulneft and the Russian ... LUKoil. It is to be noted that all that happened before the privatisation of the Bourgas-based Neftochim in October of the same year. Eventually, however, the plant situated near Craiowa was sold to the Romanian state-owned Petrom SA company which offered to pay USD15.025MN. The Bulgarian-Russian consortium failed to take it back despite the legal appeals.Two years later, EP Commerce managed to acquire 70% of Romania's only cable producer S.C. Cord SA. It became clear last year that the stake had attracted the Italians from Pirelli who were ready to pay EUR10MN in order to buy the shares controlled by the Bourgas company. It's still not known whether this investment has been implemented and the owners of EP Commerce OOD, Evgenia and George Popesku, could not be reached on the phones in Bourgas. We should mark here that the company they own is not small at all - its turnover amounted to BGN5MN in 2001, but there is no information available about the sole proprietor of the same name who has a longer history. Since last summer the Bourgas-based company has been facing another privatisation battle - the competition for the chemical TURNU plant in the town of Turnu Magurele. Again, EP Commerce has a strong parnter - the Devnya-based Agropolychim. The Serbian Universal Holding is its competitor for the acquisition of TURNU.The Devnya-based fertilizer plant which new owners are hiding behind an offshore registration is the other Bulgarian company demonstrating strong interest in privatisation on the Balkans. In Serbia, Agropolychim is considered one of the serious future applicants for the acquisition of Industry and Chemical Production (IHP) - Prahovo, one of the chemical combines included in the structure of the former Bor complex.A year and a half ago, the privatisation of the RTB Bor mining and metallurgic complex mysteriously involved the name of the unknown Bulgarian company Tropik T OOD. The copper producing complex has not been sold so far, even though a Greek and a Canadian company showed interest in it, too. A few days ago the Serbian government declared for sale two of its subsidiaries - Fabrika Bakarnih Cevi and JUGOTEHNIKA, situated in Bor. The two of them, as well as the Prahovo-based combine, have accumulated huge debts and negotiations for their sale will be hard.There is another entirely unknown Bulgarian company that became active in 2002 - this time in Macedonia. The Varna-registered Bulmak 2000 managed to submit the highest offer (EUR6.9MN) for the ailing autobus maker, FAS 11 October. According to the Macedonian laws, however, a deal can be signed depending not on the applicants' ranking, but on the decision of the other shareholders in the company. Finally, the Skopje government terminated the privatisation procedure sharing the fears of the plant workers that the Bulgarian company did not have enough money to bring it back to life. Therefore, there are no Bulgarian investors in the Macedonian privatisation except the ones related to MG.Bulgarian entrepreneurs cannot boast of succeeding in Serbia, either, although the neighbouring country became quite attractive in the past year. Balkantourist failed to acquire its Serbian counterpart Putnik, and Balkan Tour did not buy Serbia Tourist. Both companies offered for sale by the Balkan Consulting Group owned by Vladimir Karolev were acquired by the American Uniworld company.The only Bulgarian investor who makes profit in Serbia is one of the numerous companies named Helios (in Sofia alone, there are four Helios firms). On January 8, 2004, the Serbian privatisation agency approved the only offer submitted for the Kopaonik tourist complex based in Kursumlija. The offer was submitted by a consortium which involved the Bulgarian company along with the Macedonian Europa company and several individuals. The price of the deal amounts to USD270,000 and the investments promised - to USD3.6MN.

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