Bulgaria to Complete Bulk of Asset Sales in 2008, Nikolov Says

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Nov 2007

Bulgaria, which joined the European Union on Jan. 1, will sell seven water-power plants and an arms maker next year, bringing its asset sale program near completion, Privatization Agency Executive Director Todor Nikolov said. The agency has disposed of 65 percent of the Balkan country's state-owned assets and will continue the program as the government reduces a list of about 100 companies banned from private ownership, Nikolov, 40, said in an interview in Sofia yesterday. The list, drawn up in 1995 and including corporations described as vital to public services, is gradually being shortened. The agency has raised about $16.5 billion since 1995, Nikolov said, as pending EU entry boosted interest in the former communist country. The state sold seven power distributors and four thermal plants for 1.2 billion euros ($1.8 billion) in 2005 and 2006 to European utilities including CEZ AS, E.ON AG and EVN AG, providing revenue for the government to trim its budget deficit. ''Our priority is to complete the sale of the Bulgarian Sea Fleet and prepare sales of several companies in the energy sector and ammunition producer''VMZ Sopot, Nikolov said. ``This is what is left in our portfolio.'' The government expects $5 billion in foreign investment next year, including asset sales, Economy and Energy Minister Petar Dimitrov said in an Oct. 17 interview. Nikolev declined to predict how much the asset-sale program will raise. Planned sales of seven hydro-power plants will attract investors, said Nikolov, a former banker. The plants are still burdened by claims from pre-communist landowners, whom the government is working to compensate. Power Generation  ''Once ownership issues are cleared, we'll move immediately to announce the tenders for these plants,''Nikolov said. ''There is a long-term interest in clean power generation capacities like these, regardless of their size.''EU entry and access to the single market spurred foreign investment to 3.8 billion euros in the first nine months of the year after the nation lured 4.5 billion euros in 2006. The agency set a Jan. 9 deadline for binding bids for a 70 percent stake in Navigation Maritime Bulgare, the state company that operates the Bulgarian Sea Fleet. Sofia-registered KG Maritime Shipping AD was the only company that met the tender requirements and submitted a non-binding bid on Nov. 8.  The agency will sell a majority stake in Sopot-based Vazovski Mashinostroitelni Zavodi or VMZ, the country's biggest military plant, Nikolov said. It produces guided missiles and a range of mortar bombs and artillery ammunition. VMZ Strategy  ''We are preparing a sale strategy for VMZ, which has to be approved by the Cabinet and the parliament,''Nikolov said ''The sale can start in the beginning of 2008. We are now restructuring the company by selling assets not related to its core production, including rest homes and sports grounds.'' SKF AB, the world's biggest maker of ball bearings, bought VMZ's ball-bearings unit in 2002.  Two steam-heating plants in the cities of Pernik and Shoumen will complete the sales of energy companies, Nikolov said. The agency will announce an auction for Toplofikatzia Pernik AD next month, after the plant completes a 5 million-euro European Bank for Reconstruction and Development upgrading project, he said. Toplofikatzia Shoumen has unpaid debts to state natural gas supplier Bulgargas, which will make its sale more difficult, Nikolov said.