Банкеръ Weekly



The Privatization agency /PA/ in Bulgaria is considering legal action against Israeli businessman Gad Zeevi, the owner of the bulgarian national carrier Balkan Airlines, which was grounded. Zeevi controls 75 percent of the company, whose license to fly was revoked after a court in Sofia declared it insolvent in March.
According to Levon Hampartzoumian, executive director of PA, who spoke at the European Bank for Reconstruction and Development's annual business forum in London, the agency is talking to leading London law firms about suing Mr Zeevi.
Hampartzoumian declined to say what form the legal action might take. The dispute is currently being arbitrated by a Paris court.
Zeevi Holdings claims it is owned $230 million by the Bulgarian government, as part of the deal that privatized the airline in 1999.
Hampartzoumian added there was a possibility that the airline ended up back in state handsq but he would prefer it to remain in the private sector, although this could prove difficult.
At the beginning of April the airline offered a debt-for-equity swap. Balkan Airline's balance sheet showed liabilities of 247 million levs ($113 million) versus total assets of 150 million levs. On April 10, the airline said it needed one million levs to restart flights. It announced it was preparing to resume flights with the very few airplanes it still has to the bulgarian towns Varna and Bourgas at the Black sea coast and to London.
There are two other operators still operating, and the failed privatization had created an opportunity others might benefit from, said the privatization chief. Charter and freight air companies, the state-owned Hemus Air among them, continue to serve Bulgaria's air travelers.

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