Банкеръ Weekly



Vidachim AD is the most interesting company whose state-owned stake will be offered for sale at the thirteenth central tender on the Bulgarian Stock Exchange - Sofia. The Vidin-based producer of polyamide resins and rubber became a rare example of a company that recovers after going bankrupt. The tender sale of its state-owned stake will begin on September 27 and will go on until October 7. The Privatisation Agency (PA) will sell 69 companies, of which 21 will be offered in return to non-cash means of payment (investment vouchers and compensatory instruments) and 45 - in return to cash funds. Three of the state-owned stakes may be paid for by combination of the two methods.Eight thousand Vidachim shares are offered at a lowest price amounting to BGN19,280 payable in compensatory notes or investment vouchers. The state-owned stake in the company was cut to 17.09% as in June the PA decided to sell 8% of its capital at an open bidding tender. Industrial Stroy OOD was declared the winner after buying the stake for BGN23,000 in non-cash means of payment - just BGN2,000 above the initially announced price. The buyer is owned by Vidachim Executive Director Georgi Hristozov (50%) and Micromed EOOD (a company owned by the Vidachim procurator Borislav Lorinkov).Because of big debts and accumulated interests, the company based near the Danube river will have difficulties recovering from the negative financial results, at least within the coming year. It reported losses amounting to BGN2.4MN in 2003 and BGN1.5MN in 2004, followed by a BGN2.3MN loss for the first half of 2005 (BGN800,000 more than it reported as of June 30, 2004). It has an uncovered loss accumulated in prior years amounting to almost BGN4MN. For the first half of 2005 it reported BGN17.7MN long-term liabilities and nearly BGN44.2MN short-term ones. However, its general operating costs are considerably down - from BGN27.7MN to BGN13.5MN. Its revenues have fallen, too (from BGN26.2MN to BGN11.2MN). The company has not begun to sell its products abroad yet. It owned BGN77.6MN worth assets in the first half of 2005 and allocated BGN9.6MN worth reserves. Its capital amounts to BGN2.89MN.Vidachim managers expect that the company begin to make profit in 2007. It will probably start paying off its public debts then. The investments planned for the period 2007-2013 amount to BGN30MN. BGN29.4MN of that amount is expected to come from reinvested profit and the rest will be provided by credits. Revenues are expected to grow by some 200% for that time (from BGN52.5MN in 2007 to BGN151.5MN in 2013).Vidachim was declared in liquidation on December 1, 1998. An insolvency procedure was initiated in June 2001. It was interrupted because of the privatisation of the company by the Rousse-based Pristis Group Water Construction. On July 17, 2002 the group acquired 70% of the capital of Vidachim for BGN1. The symbolic price will be compensated by the company's debts which the buyer commits himself to pay off. Their amount should not be ignored (BGN68.9MN). The buyer will invest BGN13.1MN in a five-year term. Pristis Group Water Construction is property of a group of individuals. Vidachim procurator Borislav Lorinkov holds the largest stake in the Rousse-based company (33%).In three years Pristis Group Water Construction managed to save the chemical combine from the crisis that started back in 1998. The combine in Rousse has several major productions - polyamide fibres, pneumatic rubber, a repair and mechanical plant, and a thermal power station. Back in 2002 the new owner resumed the operations in the power station and partially - those in the repair plant. The company sells electricity to the National Electricity Company (NEC) only. In 2003 and 2004, that was Vidachim's main source of revenues - amounting to BGN16.5MN in 2003 and BGN21.9MN in 2004 respectively.Operations in the rubber mixtures unit were restored in May 2003. The opening ceremony was attended by the then minister of finance Milen Velchev who compared the company with a phoenix. The investment in the new unit amounts to BGN750,000. The owners of the chemical plant will remember the spring of 2003 for another life-giving event. Then the government decided to reschedule its debts accumulated after 1993 for a ten-year period, including a three-year grace term. The debts amount to BGN28MN. Last August the company restored its main production (of tyres), too. It's worth noting that following a ten-year interruption Vidachim produced tyres again last summer. BGN10.5MN were invested in the reconstruction of the plant and the continuing rehabilitation of the thermal power station in 2003 alone. BGN1.5MN more were paid in 2004. Therefore, investments made by Pristis Group Water Construction so far exceed BGN15MN. It should be taken into account that due to the over 700 jobs provided the company regains its reputation of the biggest employer in the region.

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