VARNA SHIPYARD TO BE SOLD AT A LOSS?
On April 15, in the presence of the Bulgarian Transport Minister Plamen Petrov and the MPs from NMSII Stefan Minkov and Nasko Rafaylov, were opened the four submitted offers for 75% of the assets of the Varna Shipyard. Eventually, out of the eleven companies which signed up for the competition, remained only the financial-industrial concern AKB Fores in consortium with the state-owned Iranian firm Iranian Shipping Line, the British companies Baker Invest and Madesta Holdings and the Greek Tsakos Bulgaria. Baker Investment is a leading partner of a consortium, representing the interests of the Lemos family which has been dealing with ship construction and trading for four generations. During this time the Lemoses have managed to create a whole network of contacts in the sector's international community.The other seven firms mentioned by the Transport Minister had not submitted their documents within the preliminary appointed term.The German shipyard Wessels, which was for a long time considered as the most probable buyer, gave up in the last minute. The other firms, which for one or other reason dropped off from the competition, are the British company Cammell Laird Gibraltar; Sea Technical Group - Varna; Dolphin-1 (which was said as a to-be partner of BULBANK); the Greek consortium, led by Elefsis Shipperd; the Ukrainian companies Alviston Holding and Danskan Metals and the Irish company Right Frame.The four applications will be considered by end-April by a special commission to the Ministry of Transport which will rank the candidates. The future buyer will be defined on the price as well as on the undertaken commitment to achieve revenues of USD120MN in the next three years. The selected buyer will also have to sacrifice a stake of 26% of the shipyard's capital in case it fails to meet above conditions. These conditions will be placed at the Central Depositary and in case of a failure Navigation Maritime Bulgare (Navibulgar) will remain the majority owner. On Monday will be revealed the offers' financial parameters. In April, 2002, Navibulgar acquired the assets of Varna Shipyard for BGN35MN. It was expected that now the offers for 75% of these assets will come up to at least BGN26MN.Nikolay Banev, Executive Director of AKB Fores, announced that he had offered BGN25,000,777 for the 75% stake. To a question of a BANKER weekly's reporter how he will secure annual turnover of USD40MN Banev responded that he had preliminary agreements. His partner Iranian Shipping Line had already provided a contract for the construction of 15 ships for the Iranian fleet. The ships were to serve the export needs of several oil companies. Iranian Shipping Line is a monopolist on the Iranian oil and natural gas market.According to Banev the consortium had also initiated talks with the fleet of Venezuela, but it was still unclear how many vessels would be ordered.Navigation Maritime Bulgare has started the assimilation of the first tranche of the credit launched by the German bank Hamburgische Landesbank which amounts to USD23.1MN. On January 21 the company was permitted by the Bulgarian Privatisation Agency (PA) to use the credit. PA's approval was needed as the state-owned company is still in privatisation procedure. This week were hired the first 12 workers of those who will continue the construction of the ships Trapezitza and Dolly.PriceWaterhouse Coopers AD and the consultant on the privatisation of Navibulgar are still discussing whether the company should launch a bond issue. The issue was planned to be of USD75MN with term to maturity between five and eight years.According to the credit agreements signed with English banks, presently under foreign flag are sailing 19 Bulgarian ships, pledged as guarantee (this requirement has been included in the additional guarantee conditions).The bond issue will allow Navibulgar to pay off to these institutions and to take back the Bulgarian vessels under the national flag.