Банкеръ Weekly

Briefs

TROUBLESOME PRIVATISATION DEALS - OUT IN THE OPEN

The Privatisation Agency (PA) published on its web-site a list of the incorrect buyers of state-owned enterprises and thus fulfilled the commitment of PA's new Executive Director for more transparency in this field. The black list includes 38 companies, most of them owned by MEBOs. However, 11 of them are only formally enlisted because the initially chosen buyers have hardly paid anything and no contracts have been signed. An example is the case of Sopharma, whose candidate-buyer several years ago was the Irish firm New Technology. In end-1998 the tender for Biovet was won by a company out of the financial empire of the former Yugoslav prime minister Milan Panich, who gave up the deal only months later for the reason of vast losses during the Kosovo-crisis' NATO bombing. The last number 38 in the list is occupied by the still unsold Plovdiv-based cosmetics manufacturer Alen Mak, which is undergoing the fourth privatisation precedure in a row. PA's post-privatisation unit has reported irregularities mainly concerning smaller industrial enterprises. There are a number of curious cases.The Bourgas-based company Kambana 1899, for instance, is both a buyer and an object of purchase. In 1997 the vegetable oil refinery was privatized by the Dutch company Hellian Commodities against USD5.5MN. A year and a half later the already privatized Bourgas enterprise won the bidding for its rival company located in Poslky Trumbesh. Later on it was revealed that both firms have arrears, and that Kambana 1899 was not only threatened by failure of the privatisation deal, but was also undergoing an insolvency proceeding.In 1997 the Irish Erlton Fund purchased the Kazanluk enterprise Bulgarian Rose - Sevtopolis for USD5.2MN. Now it owes to PA damages calculated on a sum almost four times higher - nearly USD23MN, which is almost impossible to be covered by a plant of that kind. The Sofia-based firm Transtourist is suffering quite similar problems. It was purchased by Magister Bulgaria for USD165,000 and now the owner turns out to owe to PA a sum almost 40 times higher.

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