Банкеръ Weekly



The radical amendment to the Privatisation and Post-privatisation Control Act, proposed by the Ministry of Economy, was voted by the members of the Government on April 29. The amendments are surprisingly similar to the practice typical for the time before 2002, when the ministries were selling their companies and the Privatisation Agency (PA) was signing agreements for the strategic enterprises. According to the Vice Premier and Minister of Economy Lidiya Shouleva, the amendments reflect the twelve years in which experience has been gathered in the privatisation process and more than 7,000 companies have been sold. Besides, they reflect the new economic situation in the country. The aim, Ms. Shouleva said, is to make the privatisation process faster and more efficient and to attract serious investors.According to information of the Ministry of Economy, there are 174 unsold enterprises in which the State is the majority shareholder and most of them are facing liquidation. State-owned minority stakes in another 400 companies have been listed for sale on the stock exchange. The remaining 120 state-owned companies have monopolistic and structure-defining role in the country's economy and their activities concern the interests of a great part of the society. That is why a special methodology for their divestment has to be prepared. Ms. Shouleva is convinced that the legislative amendments will result in a better synchronization between the PA and the respective ministers which represent the State in companies with state-owned shares. The ministries will carry out the restructuring and will prepare the privatisation strategy, whereas the PA will effect the sale.An important part of the bill are the provisions concerning the privatisation of hospitals. The process will be carried out when the Cabinet approves a strategy for divestiture of the entire sector. The Government will also approve annual plans for the privatisation of state-owned companies proposed by the individual ministries. The plans will contain a list of the state-owned commercial companies, as well as a forecast about the profit and loss for the respective year, coordinated with the PA. Before the plans are confirmed by the Cabinet, they will be approved by the Council for Economic Policy with the Government. If the Cabinet does not approve a privatisation deal, the procedure is to be terminated. The bill stipulates an alternative divestment procedure for the state-owned commercial companies listed for liquidation. They will be offered for sale, too, and the new owner will be allowed to appoint a liquidator and seek methods to cash down his receivables.According to the new provisions, the two agencies - for privatisation and post-privatisation control - will be managed by executive boards only, and their supervisory boards will be dissolved. The executive boards will report to the Council of Ministers. If there is only one management body in each of the two agencies, they will work faster and more efficiently. Past experience has proven that the two-tier management system of the two agencies renders privatisation procedures clumsier, Ms. Shouleva explained.The amendments to the law authorize the Post-privatisation Control Agency to entrust the collection of receivables to third parties. The provisions also stipulate that receivables resulting from divestment agreements should be sold on a regulated stock market. A special regulation will define the cases in which they will be traded at their par value.The drafted amendments to the law will fix a deadline expiring at the year-end, after which the owners of nationalized real estates will be paid in compensatory notes only.

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