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NAVIBULGAR AND RIVER SHIPPING HAVE SAILED TOGETHER TO THEIR SALE

The strategies for the sale of 70% of the assets of Navigation Maritime Bulgare (Navibulgar) and Bulgarian River Shipping will be moved in together for discussion by the National Assembly, Vice Premier and Minister of Transport Nikolay Vassilev announced on October 28 after the regular meeting of the Cabinet. Thirty per cent of Bulgarian River Shipping have already been privatized on the stock exchange. (The same procedure is to be held for Navibulgar as well). The minority package in Bulgarian River Shipping was purchased in end-March 2004 by the offshore company Shapiro Investment against almost BGN11MN in compensation instruments of payment. Recently, however, it transferred the shares to Alfa Finance Holding, owned by Ivo Prokopiev and Philip Harmandjiev. The majority stakes in Navibulgar and Bulgarian River Shipping are to be sold through publicly announced tenders. Both strategic investors and financial institutions will be able to bid for Navibulgar. The requirement to the strategic buyers is that they should be juristic persons, registered in Bulgaria or a member country of the European Union (EU). As an additional criterion it has been written that at least 51% of their capital should be held by companies which own vessels with a total tonnage of 1,000,000 tons or that they ship annually by their own vessels cargoes of more than 20,000,000 tons.Financial institutions interested in buying Navibulgar are also demanded to be registered either in Bulgaria or in the EU. Their owners are required to possess or manage assets worth a total of EUR200MN-plus.Mr. Vassilev announced that the Council of Ministers has unanimously approved the mandatory condition that the eventual buyers shall not re-register the acquired ships under a foreign flag within five years after closing the deal. The same restriction will be valid for the newly purchased vessels as well. Currently, the company is implementing a programme for bringing back some of our ships under Bulgarian flag. Navibulgar registered a profit of BGN40MN for the first nine months of 2004. The candidate buyers of Bulgarian River Shipping AD are required to have proceeds from logistic services exceeding an amount to be fixed in the tender dossiers or processed volume of cargoes that will be also specified in the tender dossiers. The competitors, admitted to the second stage of the tender should submit offers with the final binding price for the package of shares they will purchase, as well as a 5-year business programme. It should contain their plans for working positions, investments, and proof of financial security.The bidders for Navibulgar and Bulgarian River Shipping shall be also obliged to undertake a commitment that they will not lower the acquired stake to less than 51% within three years. The offers will be considered by the Privatisation Agency which will make the rating and the winner is to be chosen by the Council of Ministers.

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