Банкеръ Weekly



It seems that Incoms Telecom Holding will be the consecutive big local enterprise, whose privatisation will be stalled in legal arguments. After the sale deal with the US company C.P.C. was cancelled in mid-January by the Executive Board of the Privatisation Agency (PA), headed by Apostol Apostolov, the stance of PA's Supervisory Board is expected now. If the deal's invalidation is confirmed by PA's Supervisory Board, C.P.C. will lay a claim at the Supreme Administrative Court (SAC), the US company's consultant Krassen Stoyanov said.The contract for the divestment of Incoms Telecom Holding was signed on December 10, 2001. Ten per cent of the entire purchase price of BGN15MN had to be transferred to PA's accounts on the same day, and the balance of BGN13.5MN could be paid in compensation instruments. However, only BGN500,000 was paid in cash by December 20, and about half of the remaining amount was paid in non-cash instruments. Therefore, PA's Executive Director Apostol Apostolov notified the US company and its representatives in Bulgaria that they owed BGN1MN more, and the purchase contract would be cancelled if the due amount was not paid within 20 days.The conflict between the PA and C.P.C. began with regard to the date from which the 20-day notification should be recknoned. Under the contract, a notification can be faxed as well, but its receival should be confirmed. The US investors claim they received the message on Janury 5. Therefore, the 20-day warning expires on January 25, according to them. C.P.C. promised to settle its payments by that date. But on January 21 the PA notified ROSEXIMBANK (servicing the US company) that the contract was cancelled due to default on the part of the buyer. When litigating PA's decision the lawyers of C.P.C. intend to point out the motive that the US company was not allowed to settle its payments by January 25.However, there is some talk that Mr. Apostolov has personally ordered the opening of a new sale procedure for Incoms Telecom Holding, and even that a new candidate buyer has already turned up - a company from Malaysia, behind which Bulgarian interests stand. Pundits say that it is namely Bulgarian businessmen who have a hand in the expected new procedure for the holding's divestiture. They are said to have initially promised to pay a least BGN15MN (half in cash and half in compensation instruments), but have later on backed out of the bargain, arguing that such a price was too high. Thus, the PA might find itself in an awkward situation - cancel the deal without being sure there would be an alternative. And if a future tender for Incom Telecom Holding's privatisation fails, bankruptcy procedures might well follow. At least, such a stance was expressed in front of the Ministry of Economy by the enterprise's Management Board. It is said that auctions are already being prepared for the sale of equipment from the telephone plant in Belogradchik in order to pay off liabilities of BGN800,000, accrued by Incoms. The holding's total debt is huge - exceeding BGN2MN - but is not being served due to lack of orders. On the other hand, some sources say, there is some BGN3-4MN on the company's bank accounts.

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