Банкеръ Weekly



The candidates for the divestment of Bulgaria Air will have to offer a minimum price of BGN10MN. The unexpected condition was announced by the Privatisation Agency (PA) on September 14. Preliminary offers for participation in the contest were filed by two companies - Balkan Hemus Group through which Chimimport's subsidiary Hemus Air participates, and Air One Bulgaria, the domestic company of the eponymous Italian air company. During the week the PA announced that both candidates have been admitted to the final stage of the two-stage contest. They should submit their final offers by October 5. Inquiries and applications for explanations of the tender procedure will be made by September 29.
However, it's much more curious why the PA has suddenly decided to set the minimum purchase price for Bulgaria Air at BGN10MN. Such an amount is not mentioned anywhere in the Parliament-approved strategy for the company's divestiture. So far both Transport Minster Peter Mutafchiev and PA head Todor Nikolov have refused to specify their expectations about the air carrier's price.
According to BANKER weekly sources, the fixing of an initial bidding price was motivated by the too low preliminary offers, filed by Balkan Hemus Group and Air One Bulgaria, which were not up to the expectations of the PA and the Transport Ministry. According to experts, however, the future owner of Bulgaria Air will probably have to deposit another BGN20MN in the company's capital. They recalled that the air company was established in November 2002 as the successor of the bankrupt national air carrier Balkan. Its authorized capital was a little over BGN30MN, of which BGN10MN was immediately deposited. The balance is still pending.
It is quite possible that all these circumstance would cool down the appetite of the most ardent candidates for the purchase of Bulgaria Air, especially having in mind that the company reported a BGN12MN loss for the first six months of 2006.

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