Банкеръ Weekly



The drama around Sunny Beach AD's state-owned estates is expected to reach its climax within weeks. The company's management has invited tenders for the sale of seven unbuilt sites in the eastern part of the resort. The lands in question had been part of the state-owned forest fund about 40-50 years ago and then had been transferred to Balkantourist. Their overall starting price was announced to be USD7,495,938. It must be noted that the potential buyers are expected to express interest in these lands' privatisation within very short notice. They can buy required documentation by Monday (Septembet 30) and the announcement in the Official Gazette appeared only ten days ago. October 1 is the deadline for any inquiries on the privatisation procedure. The tenders will be held in two stages - initial and final. Deadlines are specified in the tender dossiers.Malina Bakalova, Executive Director of Sunny Beach AD, informed the BANKER weekly that the company's Board of Directors had picked up that sales method so as to be able to influence on the land's usage. The plots are big - about 44,000 sq. m. On some of them hotels are to be built, as well as water attractions, sports facilities, parking lots and garages. If a public tender with open bidding (the way in which several sites were sold in June) was invited, the management of Sunny Beach AD would not have any say on the establishments' future.Almost the whole sum from the sale will be written as profit in company's balance sheet. Keeping in mind that the profit of Sunny Beach for the first half of 2002 exceeded BGN24MN, with this money it can easily reach BGN40MN by the year-end. And if the Government observes the decree by which all companies with majority state-owned stake are to pay up 80% of their profit as dividents after placing 10% in the Reserves Fund, then the shareholders of Sunny Beach AD have quite a reason to be happy. Calculations show that they will share more than BGN22MN or over BGN11 per share. If compared with the present market value of the company's papers - BGN17-19 per share, this is more than a good hit. The legal advisors of Sunny Beach AD announced that no restitution claims exist concerning estates in the eastern part of the resort. The already filed restitution cases concern mainly return of the property on sites in the western part of the resort. There are tens of cases of the kind which have reached various instances - municipal, appelation or cassation courts. For the time being former owners are winning.Slightly more different is the situation regarding the resort's parks and alleys which were written in as public municipal property by the Mayor of Nessebar. Malina Bakalova specified that she had still not received the Mayor's order, yet Sunny Beach would most probably ask it to be cancelled by the Governor, as the land had been included in the company's capital. 75% of the company are state-owned and the rest 25% were sold in 1996 after the first stage of mass privatisation, and are now among the most actively traded bonds on the Bulgarian Stock Exchange. Obviously the decision of municipal authorities contradicts to the interests of the company's shareholders.The mayor's order, however, will delay the evaluation of the resort's infrastructure as it also includes the sports parks, the alleys and the roads. And all plans of the Ministry of Economy to sell these objects to hotel owners will also be postponed. By the way, only a few owners of estates on the resort's territory appeared interested in buying part of its infrastructure which means that perhaps some alternative ways for infrastructure's privatisation are to be sought.

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