Банкеръ Weekly

Briefs

REI HOLDING WILL BE BREAKING THE STATE'S MONOPOLY IN RAILWAYS

It won't be a great surprise if the first private trains in Bulgaria start by the year-end. By the enforcement of the Railway Transport Act as of January 1, 2002, the National Railways Company (BDZ) lost ist monopoly position on the local market, and experts of the Ministry of Transport and Telecommunications believe that Kremikovtsi, LUKOIL Neftochim Bourgas, and Umicore (which were so far BDZ's biggest clients) would be the first to bid for a licence.We are holding negotiations for the establishment of companies for transportation of cargoes, Elena Ivanova, one of the managers of REI Holding AD, said in front of the BANKER weekly. REI Holding incorporates more than 50 firms, including 12 plants in Bulgaria, Greece, the Ukraine, Moldova, Germany, Austria,a nd Namibia. The sales of all its divisions in Bulgaria and abroad amounted to USD250MN last year, and their consolidated balance sheet value was around USD300MN.The name of REI Holding circulated last week in the media after it became known it was among the most serious pretenders to operate as a private carrier of passengers and freight. The holding's ambitions are well-grounded. Since 1999 it has been holding the majority packages in the wagon-repair plants in the towns of Karlovo and Levsky, the Locomotive and Wagon Plant of Rousse, and the Repair Rehabilitation Company in Sofia (maintaining the entire railway infrastructure in the country). Its experience in the insurance business should not be neglected either. REI Holding is the owner of the insurance company EuropeThe holding's name comes from railway and electrical industry, which we wanted to develop since the establishment, Ms. Ivanova explained. She and the other co-founder of the company - Petko Tarashmanov - are railway experts, while their third partner - Ivan Pavliv - is an electrical engineer. The first companies were registered back in 1990 and unified two years later. By the force of economic logics we decided the companies could be better managed within the structure of a holding, Ms. Ivanova recalled. She quotes 1996 as a turning point in the holding's development due to the purchase of a 51% stake in Energokabel - Sofia. Thus, the trade holding turned into a trade and industry holding.After 1996 REI Holding set itself the ambition to take a leading position in Bulgaria's electrical engineering industry and privatised three local enterprises in the sector. All investments over the last five years have been directed to the export-oriented production of these plants. In 1997 the holding was transformed into a financial industrial group, but retained it name. In the same year more than 50 enterprises entered into the structure.REI Holding has projected an exotic USD20MN investment for 2002. The money will be invested in the construction of a dockyard and a tailoring enterprise in Namibia (although propellers are repaired at the Rousse-based plant, as well). Contracts for joint operation have already been signed and joint-ventures are to be registered.

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