Headlines (July 12 2002):
FRENCH PARIBAS IS THE LIKELY CONSULTANT IN THE POWER-DISTRIBUTING COMPANIES SELL-OFF
The French Paribas Bank is likely top be selected by the EBRD for a consultant to the government in the privatization of the seven power utility companies, sources from the Privatisation Agency announced. The bank has ranked first among the four candidates in the final round of the tender, carried out by the PA and the Energy Ministry. The PA went on to clarify that the consultant would be ultimately approved after the pending talks with the winner. The Consultancy contract will be for the span of a year and the EBRD will pay the consultant about EUR 1 million.
Seven companies were shortlisted - AMRO Bank, BNP Paribas, Citigroup, HSBC. J.P.Morgan. Rothschild, Roland Berger/Raiffeisenbank. The consultant's assignment is to devise a sell-off strategy for the seven power-distribution utilities or packages of them Actually, the companies will be grouped in three pools in combination will less attractive assets. The idea is a strategic investor to be found for the purchase of stakes ranging from 51% to 80% in the power-distribution companies by mid-2003.
The major problems, which the would-be buyers will have to face, are to shrink the technological losses of electrical energy, to boost the collection of receivables. The technological losses for the whole country stand at 22% and this figure should be dropped down to 7% at the most, in conformity with the EU requirements.
Following the selection of a strategic investor, shocks from the power utilities will be floated on the stock exchange
The aggregate balance profit of the seven companies for 2001 was EUR 16.7 million, the projected profit for the current year is EUR 22 million.
The German E.ON Enegie has already proposed to set up a JV with the Sofia power distribution company. The Germans have suggested obtaining the majority shareholding and the Bulgarian side to joint with non-cash assets. Energy Minister Kovachev has recently hinted that the government anticipates reaping USD 350 million from the utility privatization deals.
CABINET SETS UP NATIONAL REVENUE AGENCY
In compliance with a commitment to the IMF and the World Bank the cabinet approved a bill stipulating that a National Revenue Agency be set up. The World Bank-funded project is priced USD 60 million.
The new agency will be subordinated to the Finance minister and will manage the collection of all public receivables like taxes, charges, public duties, social and pension insurance contributions, state and municipal fees. The agency will not become operative before 2005. Once in function, it is expected to speed up tax collection and relieve the social security burden. Initially the NRA will use the network of the territorial offices of the tax administration, which is possibly to merge with the agency in 2004. The NRA is also meant to absorb at the later stage the National Social Security Institute, responsible for the collection of social and health insurance contributions.
TENDER FOR WATER TREATMENT PLANTS TO BE LAUNCHED
The Ministry for Regional Development and Public Works is set o launch a EUR 41million tender for the construction of wastewater treatment plants along the Maritsa river basin and in the towns of Stara Zagora and Dimitrovgrad.
The project is o be funded by the ISPA programme of the European Union, the European Investment Bank and the national budget. Bidders are expected to plant their offers by October 7, the winner is to be announced by the end of the year. Sale of tender documents in underway.
GREEK ALLUMINIUM PRODUCER TO MAKE GREEN FIELD INVESTMENTS of EUR 3.8 MILLION
Alumil Milonas, the Greek alluminium producer, plans to invest EUR 3.8 million in the construction of a new factory in Varna. The investment involves expenditures for the establishment of a production-distribution center in Varna.
Varna Aluminium, another entity of the Greek company, has recently bought a plot of land of 20,000 square m, which is regarded as the future construction site.