PIERRE MELLINGER COMES BACK TO THE BULGARIAN FINANCIAL MARKET
The Warsaw-based AIG New Europe Fund (AIGNEF) has acquired 51% of the Bulgarian financial company Jet Finance by participating in the increase of its equity capital from EUR1,048,000 to EUR6MN. The investment fund's President Pierre Mellinger came to Sofia in order to sign on June 8 the contract for the acquisition of Jet Finance shares. By that deal Mr. Mellinger comes back on the Bulgarian financial market, from which he should have only pleasant remembrances regarding finance. As a representative of the European Bank for Reconstruction and Development (EBRD) in July 1997 he became chairman of the Board of Directors of United Bulgarian Bank (UBB), which was sold to three investors against USD3MN the same month. Now, four years after the successful deal in UBB's stocks, Mr. Mellinger comes back to Bulgaria, investing over EUR3MN in Jet Finance - a company which extends to citizens loans of up to BGN3,000 for the purchase of goods from 800 stores and trade chains all over the country. The capital investment seems quite advantageous, as within the three years of its operation Jet Finance has ensured financing for more than 70,000 such purchase deals, worth EUR16MN-plus. Obviously, there is considerable interest towards that type of credits, although they render the purchased commodities 35% more expensive (annually). If the banks offer to citizens credits with such an annual interest rate, customers will cry with indignation, but consumers seem not to notice that price increase when buying goods on deferred payments. As long as such a service is demanded, it will be offered at a high price. The philosophy of the founder and one of the major shareholders in Jet Finance - the Albanian Alvin Guri (who acquired a Bulgarian citizenship two months ago) - is that each person in this country has the right to buy on deferred payments the commodities he needs, e.g. a PC, video- and audio-recording equipment, or household appliances. With such ideas in view Mr. Guri with several partners set up Jet Finance three years ago. His project proved very successful, as many citizens who are unable to provide documents for their incomes to banks use the services of financial institutions such as Jet Finance. It is a fact that the aggregate profit of the company for 2002 and 2003 amounts to some EUR400,000, or about 40% of its equity prior its increase from EUR1,048,000 to EUR6MN. Pierre Mellinger has certainly realized that Jet Finance has a pretty good potential for development and has therefore decided to invest EUR3MN in the company with the idea of selling the majority package of shares he holds in it for a much higher price in a year or two.