Банкеръ Weekly

Briefs

WILL BALKANCAR SREDETS CHANGE GROUND?

Balkancar Sredets will keep its operations but they may be moved to another ground. That was announced after Roumen Ovcharov, Minister of Economy and Energy, visited the company on Tuesday. During the meeting he assured the workers that the future owner would retain truck production for three more years at least, even if it is not on the same ground. The plant itself is not so attractive as the ground on which it is built. The main platform is located on 122,000 sq m on 38 Totleben Boulevard in Sofia. Thirty-nine production and service buildings are also located there. A square metre of the land now costs at least EUR200 - EUR250. It means that the estate alone, without the production buildings, costs at least EUR24MN, or BGN48MN. It turns out that the new owner will acquire, in return to at least BGN20MN (the initial price announced by the Privatisation Agency) land that costs twice more. The ground is suitable for building residential houses, large commercial complexes and even an amusement park. Balkancar Sredets also owns two holiday stations. The one near Samokov has three floors and is situated on 26,429-sq-m agricultural estate. The station in Kiten is located on a ground of 16,811 sq m.
The procedure for privatisation of the company was initiated last January. The Privatisation Agency announced an initial price amounting to BGN20MN. All participants in the competition will be required to pay a BGN4MN deposit. Applicants for the truck plant will have to meet several requirements. They need to be commercial companies, their activity must include production of machines and details, and they need to have reported not less than BGN20MN annual revenues in the past three years. They are also required to have possessed fixed assets worth at least BGN20MN in the last financial year. Consortiums and offshore companies are not allowed to participate in the competition.
A 69.99% stake of Balkancar Sredets capital which is owned by the state will be offered for privatisation. The company's registered capital amounts to BGN376,926 and is distributed in 376,926 shares with BGN1 face value. Shares of the capital are also owned by the insolvent Balkancar Holding EAD. As of November 30, 2005, there were 123 workers and employees working in the plant. The main subject of operations of the company includes production, service, repair and trade with electric trucks, motor trucks and other elevating equipment. The company also produces components and spare parts for the trucks. Its production capacity is about 400 trucks per year. Balkancar Sredets sells its products both on the domestic and the foreign market.
In the past two years Balkancar Sredets has been reporting profit, while in 2003 it had a loss amounting to BGN1.553MN. Although the positive financial results are low (BGN22,000 for 2004 and BGN25,000 for 2005), chances are the company will keep operating at a profit.

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