Банкеръ Weekly



Minority stakes in 15 large local companies will be sold on the stock exchange, Deputy Premier and Minister of Economy Nikolai Vassilev promised during the Southeast Europe Economic Forum. Investors will be able to acquire shares in Bulgartabac Holding, Bulgarian Telecommunication Company (BTC), Navigation Maritime Bulgare (Navibulgar), Bulgarian River Shipping, DSK Bank, the National Electricity Company (NEC), the Varna Thermoelectric Power Plant, and in most of the seven regional energy-distribution companies. Between 15% and 30% of their capital will be go public. However, the list is not ready yet, Mr. Vassilev added. The fact that the fuel distributor Petrol (in which the State holds a merely symbolic stake) was included in the above-metioned list showed there was not yet much clarity on it. The sale of the stakes will begin as soon as the amendments to the Public Offering of Securities Act are passed, which is planned for December, the Deputy PM said. Mr. Vassilev's initial idea was to offer the stakes on the Bulgarian Stock Exchange only, since neither of the best local companies is strong enough to attract the interest of a well-known international bank which could list it abroad. According to Vladimir Karolev from Balkan Consulting Company, however, the Government is able to succeed abroad if it offers to a single financial institution to take a pool of 10 or 15 attractive packages. However, the institution should be obliged to buy the shares at ts own expense in case no investor is interested in them, Mr. Karolev added. Otherwise, a possible failure will seriously damage Bulgaria's even now not so good image of a place worth investing in. The proposal is reasonable and will be additionally discussed, Mr. Vassilev said. So, Bulgarian issuers still have chances to be traded abroad.Vladimir Karolev also proposed an idea, shared by Nikolai Vassilev while he was still working for London banks. He said the opportunities for investment in Bulgarian companies should be presented abroad in the so called road-shows.However, market players were not quite satisfied with the mere promises they heard. Promises in previous discussions brought no concrete results. Experts were excited by a draft decision that companies with dominating state control should allocate 80% of their profit as dividends. It will reflect on minority shareholders in the companies within Bulgartabac Holding, the Plovdiv-based cosmetics manufacturer Alen Mak, and the seaside resort Sunny Beach. A confirmation of this draft will definitely satisfy the shareholders in Sunny Beach, since the resort is expected to report BGL65MN in profit for 2001, which is over BGL30 per share (the financial result includes the recent sale of hotels by the Privatisation Agency). After taxation, it turns out that next spring the general meeting of Sunny Beach will vote for net dividends worth BGL17 per share, while the current market price of its stocks is BGL8 apiece. A week ago it became clear that the Ministry of Economy had already decided whether to apply the scheme in this case, but no details were revealed. No solution has been proposed to the problem with shareholders in Bulgartabac Holding, which was caused by the announcement that the holding would be sold as a whole company. Alexy Andonov said during the economic forum that there were two logical options. On the one hand, the future majority owner may place a tender offer to buy the stakes of the other shareholders in Bulgartabac's subsidiaries. An internal swap operation is the other alternative - for example, shareholders in Blagoevgrad-BT may be given stakes in Bulgartabac Holding in return. Nikolai Vassilev refused to discuss the case. The new legislation frame of the capital market is almost ready. The amendments to the Public Offering of Securities Act will be submitted to the Council of Ministers on October 25. The regulations of the market of compensatory notes are ready too. According to Deputy Premier Vassilev, the legislative changes will be enforced in December.

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