Банкеръ Weekly



After the failure of the former government's several attempts to sell the Botevgrad-based bus-maker Chavdar EAD (which has been idling for years) the Ministry of Economy, headed by Nikolai Vassilev, will renew these attempts. Open tenders for the sale of the enterprise's four self-contained parts and of its short-term assets have been scheduled for February 28. According to pundits, however, the minimum price set for the bus manufacturer is too high. BGN16,623,000 has been asked for the purchase of the main site with all equipment on its. For comparison, the initial price of the bidding for the assests of another company in the transport machine-building sector - the Varna Shipyard - is USD20MN, including several unfinished vessels. The site for the production of buses spreads on a built-up area of 69,000 sq. m and has been valued at BGN7,690,000, i.e. BGN110/sq. m. And the equipment on it was purchased in the 1974-1985 period.The hopes of the Ministry of Economy are obviously connecetd with world-famous names in the branch. Chavdar EAD's liquidator Yulka Peneva informed the BANKER weekly that letters have been sent to 15-16 big bus manufacturers, the German MAN and the Swiss Volvo among them. But the attraction of investors of that rank will not be an easy task, especially having in mind that the most serious candidate for self-contained parts of Chavdar was from Saudi Arabia and it did not file a bid at all. Russian companies (Kamaz for example) have also visited Botevgrad in the last few years to view the bus-maker.The bidding for the chasis manufacturer, which is also a self-contained part of Chavdar EAD, will be interesting, too. In fact, it almost entirely consists of immovabble property and is, therefore, suitable for the development of various kinds of businesses. Some time ago an Italian textile company (intending to make military uniforms for the Italian army) was a candidate for it. A few months ago a German company wanted to produce cables on the site. The initial price for the facility, including more than 20,000 sq. m of built-up area, is BGN2,658,220.The sale of the other self-contained parts of the company would hardly cover even a minimum part of its debts. Other tangible assets, worth a total of BGN163,100, will be offered on February 28 as well. Various short-term assets, including over 30 tons of sheet iron and about 40 tons of steel will be put up for sale.A new tender will be invited a month later for the assets, which are not sold on February 28. If the two main self-contained parts of Chavdar EAD are sold, the proceeds would almost certainly cover the payment of its liabilities, amounting to some BGN19MN. More than half of the company's debt is to the former State Reconstruction and Development Fund (SRDF), whose assets and liabilities have been transferred to the State's budget. Chavdar is also indebted to the local municipality, to the Social Insurance Fund, to workers and suppliers. The loan from the SRDF was drawn in the mid-90's for the production of buses under a deal with the Bourgas Municipality, which defaulted payment and Chavdar became indebted to its owner - the Ministry of Economy. On February 7 the Bourgas Court of Appeal will hear the case of the local municipality's debt to Chavdar EAD. Whatever the magistrates' ruling might be, the case will most probably go to the highest instance - the Supreme Court of Cassation. This means that the bus-maker could get its money back in end-2002 at the earliest.

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