Economic
News from Bulgaria
(June, 1998 No 6)
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Economic
News from Bulgaria (June, 1998 No 6) |
WHY CHOOSE BULGARIA FOR TOURISM INVESTMENT (Continued from Infobusiness No 5/98) At the cross roads of East and West Bulgaria has it all - sunny Mediterranean sryle beaches, abundant ski-slopes, fascinating historic towns and villages, art, culture and folklore, the richest bio-diversity in Europe. Plus an authentic, traditional lifestyle which has disappeared in much of the rest of Europe. The Marketing Strategy and Action Plan for Bulgarian Tourism 1997-2000 prepared under the EU Phare program, forms the basis for the future marketing programs of the Ministry of Trade and Tourism. MAIN STEPS OF THE PRIVATIZATION PROCEDURE 1. Contact the Ministry of Trade and Tourism (MTT) for more detailed information about the country, priatization legislation and list of companies ready for sale. A priatization procedure will be initiated for any enterprise as soon as a Potential Investor (P.I) declares his interest in its privatization. 2. Each company selected for privatization is treated by the MTT as a separate project with a Project Team (P.T.) of experts responsible for it. The P.T. informs the P.I.s about the opening of the privatization procedures and the stage of the privatization project. 3. In order to be registered as a Potential Investor, the investor should submit an informal letter of intentions describing his Presentation and his Business intentions at the MTT. All domestic and foreign investors are treated equally by the MTT. 4. Once a priatization decision is made by the MTT it is published in the Official Gazette and in addition in at least two national newspapers, describing the means, the terms and the conditions of the priatization deal. The publication contains an official deadline for purchase of the bidding documents and submission of offers. After the expiration of the deadline no more bidding documents will be sold to P.I.s. The purchase of bidding documents is an obligatory condition for the participation of the P.I. in the procedure. 5. All potential inestors fill in a Declaration of Confidentiality. Then the P.T. releases against a payment a set of bidding documents and forms including an Information Memorandum containing detailed corporate information and legal analysis of the targeted enterprise. 6. The P.I. and his consultants should visit the targeted entarprise and conduct Due Diligence, before submitting the offer. 7. The P.I. presents his offer to the MTT before the announced deadline. The offer should include proposals for the purchase price, means of payment, taking on or payment of debts, investment plans, and number of jobs to be secured over a specified period of time. A five year business plan is submitted in support of the presented offer. All these requirements are described in detail in the set of bidding documents. 8. The selection of a buyer by the MTT is based on a comparison of the submitted offers and negotiations with the P.T. 9. The final contract is elaborated by the MTT and signed by the Minister of Trade and tourism. 10. The MTT monitors the obligations undertaken by the investor in the contract. |
OBJECTIVES OF THE PRIVATIZATION PROGRAM OF THE MINISTRY OF TRADE AND TOURISM APRIL 1 - DECEMBER 31 1998
MEANS FOR CARRYING OUT THE PROGRAM
PROGRAM FOR THE 1998 PRIVATIZATION AS PER QUARTERS TOTAL AS OF 01.04. QUARTERS
LIST OF TRADE PARTNERSHIPS INCLUDED IN THE PROGRAM FOR PRIVATIZATION DURING THE SECOND QUARTER OF 1998 OF THE “STATE PARTICIPATION AND PRIVATIZATION OF
LIST OF THE SEPARATE PARTS INCLUDED IN THE PROGRAM FOR PRIVATIZATION DURING THE SECOND QUARTER OF 1998 OF THE “STATE PARTICIPATION AND PRIVATIZATION OF
LIST OF TRADE PARTNERSHIPS INCLUDED IN THE PROGRAM FOR PRIVATIZATION DURING THE THIRD QUARTER OF 1998 OF THE “STATE PARTICIPATION AND PRIVATIZATION OF
LIST OF TRADE PARTNERSHIPS INCLUDED IN THE PROGRAM FOR PRIVATIZATION DURING THE FOURTH QUARTER OF 1998 OF THE “STATE PARTICIPATION AND PRIVATIZATION OF
(Privatization Department) 12 Al.Batenberg Str. 1000 Sopfia, Bulgaria Tel. (+359 2) 882 011, Fax (+359 2) 803 968 e-mail - mtt@bis.bg
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PUBLIC COMPANIES ACCORDING TO BULGARIAN LAW by Alexander Katzarsky A new category of companies limited by shares - public companies, has been established by the last amendments to the Law on Securities, Stock Exchanges and Investment Brokers (published in the Official Gazette No. 42 of 1998) - the new Section Four of Chapter Four of the Law. Special rules differentiating from the provisions of the Commercial Law for companies limited by shares have been enacted in order to protect the investors through the capital market. A company limited by shares is a public one provided it satisfies one of the following three conditions: (a) the company has issued shares offered to the public, which means by a public-offer prospectus approved in advance by the Commission on Securities and Stock Exchanges (hereinafter called the Commission), or (b) the shares are admitted to stock exchange listing or are traded on a regulated market which means that all companies which shares are acquired on a stock exchange (there is one stock exchange seated in Sofia licensed at the moment) or a regulated market (there is no regulated market licensed till now in Bulgaria) are public ones, or (c) at least 50 shareholders have acquired at least 10 % of the company capital in a case of public-offer prospectus. These criteria were satisfied by a lot of existing companies at the moment when the Law entered into force. A significant part of those public companies are the key participants in the “mass” privatisation - on one hand, the state enterprises (transformed in companies limited by shares) privatised within the programme for privatisation with investment bonds and, on the other hand, the privatisation funds (now transformed either in holdings or in investment firms) which had accumulated a predominant part of the investment bonds and acquired a substantial part of the capital of the enterprises privatised. A public company is obliged within 14 days of the moment when one of the three above mentioned requirements is answered to apply to the Commission to be registered as an issuer (a person who either issues, sells or offer for sale securities issued by him or subscribe candidates for a public-offer prospectus). The company has no such obligation if it has already registered a issue of shares at the Commission, e. g. in order to apply either for an approval of a public-offer prospectus or for admission of the shares to stock exchange listing. The companies which have become public at the moment when the Law entered into force, including the state enterprises privatised and the former privatisation funds, were obliged to apply for such registration within one month - till May 18th, 1998. The shares in a public company are registered shares without physical form (neither document nor any kind of paper is issued for the shares) and freely negotiable, i. e. the instrument of incorporation provides no restrictions or special conditions for their transferability. The transfer of those shares is effected at the moment of the registration of the transaction in the Central Depository which keeps the book of the shareholders of the public company. The shareholders’ rights are proved with a registration document issued by the Depository. The shares of the existing public companies have been transformed in registered shares without physical form and freely negotiable by virtue of the Law no special amendments to their instruments of incorporation being needed. The companies which have become public at the moment when the Law entered into force, including the state enterprises privatised and the former privatisation funds, were obliged to register their shares in the Central Depository within one month - till May 18th, 1998. Their shares may be traded only after their registration in the Depository. The shares of the public companies may be traded only on stock exchanges or regulated markets (and until at least one regulated market is licensed they may be traded only by investment intermediaries). The shares in public companies may be exchanged only for state securities or shares in other public companies. These restrictions are not applicable to transactions between natural persons. The Law guarantees the shareholders in public companies and especially major ones against the possibility the portion of the capital owned by them to be decreased by a General Meeting resolution. The General Meeting resolutions either for increase of the capital with a refusal of the shareholders from their preferential subscription rights for the additional portion of the capital or for increase of the capital under the condition that the additional portion of the capital has to be subscribed by a definite person have to be passed with a majority of 3/4 of the capital represented at the meeting provided at least 3/4 of all the shareholders with voting rights attended the meeting. If the meeting is not attended by the necessary number of shareholders a new meeting may be held within one month and it may decide on both questions for the increase of the capital with the same majority but provided the meeting is attended by half of the shareholders with voting rights at least. The public company has been imposed by the Law an obligation certain information to be submitted to the Commission and published on a regular basis. The obligation comprises the year and half-year reports as well as the amendments to the instrument of incorporation, changes in its managing bodies, court proceedings initiated by or against the company, beginning of insolvency proceedings, transformation of the company, any changes in the business activity of the company which may affect directly or indirectly the stock exchange price of the shares. The purpose of the obligation is to provide in due time the investors including the potential ones with enough and important information concerning the public company. The company may lose its characteristic of a public company only if its name is struck off the register of the Commission provided both the following conditions are satisfied: (a) there is a resolution of the General Meeting in this reason, and (b) the number of the shareholders in the company is less than 50. Only after the loss of the characteristic of a public company the shares of the company may be substituted with another type of shares, for example, registered shares with physical form or bearers shares, the instrument of incorporation may provide restrictions or special conditions for the transferability of the shares or the company may be transformed in another type of company, for example limited liability company.
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NON-FERROUS METALLURGY
ALUMINA SPJSCo. |
SVETLINA SPJSCo.
29 Aksakov Str., 1000 Sofia, Bulgaria Executive Director tel.(+359 2) 987 75 79, fax(+359 2) 980 38 46 Marketing Department tel.(+359 2) 980 42 50, 987 99 80, 980 82 75, fax(+359 2) 981 62 01 Internet http://www.Privatisation.online.bg E-mail: bgpriv@online.bg
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INFOBUSINESS BULLETIN BOARD No6/'98 INFOBUSINESS
DEPT., BCCI
NIKROAD Ltd.
HRANEXPORT Plc.
AVTOMOTOR CORPORATION Plc.
KARDJALI CHAMBER OF COMMERCE AND INDUSTRY
AKC Ltd.
NATALIA Ltd.
UINCOM Ltd.
BAYDANO Ltd.
ET"MIG"
BULCOM Ltd.
SIONMEZ INTERNTIONAL Ltd.
ARTEX Plc.
TUBIAF (TURKISH BULGARIAN BUSINESSMEN FEDERATION)
EVEREST Ltd.
PRESTIJ Co. Ltd.
CHIMIMPORT Plc.
PRIVATIZATION AGENCY
FREE TRADE ZONE
HLEBOPROIZVODSTVO Plc.
ORBITA TOURS Ltd.
LAZUR Plc.
ASSOCIATION OF BULGARIAN & TURKISH BUSINESMEN (BUTID)
STREAM Ltd. (authorised dealer of KaleTerasil)
VLADIMIR DISTILLERS Comp. Ltd.
TRANSIMPEX EAD
PNEUMATICA Plc.
MRAZ Plc.
ET "VLADI POPOV"
The Infobusiness Department offers to its clients from abroad to avail of the opportunity to submit their offers and inquiries for business contacts with Bulgarian partners through the English version of the INFOBUSINESS BULLETIN, BCCI publication, that will be widely spread. For this purpose we would kindly ask you to fill the following OFFER/INQUIRY FORM and to send it to Infobusiness Dept. BCCI. Price: 10 USD for one insertion of an offer, and 40 USD - for five insertions of the same offer. Please, remit the amount to BCCI bank account code 62196214, account No. 110-030-812-8 at BULBANK, Sofia, Bulgaria. To be returned with an enclosed payment document to: INFOBUSINESS Bureau, Bulgarian Chamber of Commerce and Industry, 42 Parchevich Str., 1040 Sofia, Bulgaria.
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THE BULGARIAN CHAMBER OF COMMERCE AND INDUSTRY ORGANIZES A BUSINESS-DELEGATION IN TURKEY From June 3 to June 6, 1998, the Bulgarian Chamber of Commerce and Industry organizes a visit of a business-delegation to Istanbul within the frame of the official visit of Mr. Valentin Vassielev, Minister of Trade and Tourism. On June 4, 1998, a Business Forum with a plenary session and individual meetings shall be held with the support of the Foreign Economic Trade Board of Turkey. BCCI will publish a special bulletin including a list of the participants and their interests in Turkey. As we know, in the last few years business contacts between BCCI and Turkey have been very active. On June 8 and 9, 1998, during the regular gathering of the South-Eastern European Foreign Ministers in Istanbul, FETB (Foreign Economic Trade Board) organizes a business meeting in which Bulgarian companies headed by Mr. Bojidar Bojinov, President of BCCI, will participate.
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A FORTHCOMING ECONOMIC FORUM EUROPEAN COMMISSION (BRUSSELS) - BULGARIAN CHAMBER OF COMMERCE AND INDUSTRY by Lijuben MIKHAILOV At the proposal of the European Commission (Brussels), on June 11 and 12 this year in Sofia, at the Grand Hotel Sofia, an Economic Forum will be held. The Bulgarian Chamber of Commerce and Industry will be a partner of the European Commission and two other companies for organising the event. BCCI will present 30 private and state companies dealing with textile, fur, shoes, construction, electrical engieneering, informatics, telecommunications and banking, which will take part in the Forum. The goal of the Forum, in which representatives of 20 Western European companies will participate, is to establish direct contacts between them and the Bulgarian partners, acquainting the participants with programs for research and development activities and new technologies, carried out with the support of the European Commission. Also, an establishment of a permanent connection between the foreign investors and the Bulgarian entrepreneurs, a setting up of an information electronic structure, unified methods for cooperation and computer network will be provided for. During the first day the program will provide for official meetings between representatives of the European Commission and representatives of the Bulgarian ministries and agencies of industry, privatization, foreign investments, BCCI, the Municipality; and bilateral meetings between foreign and Bulgarian entrepreneurs, producers and traders. During the second day, the programs for research and development activities and new technologies carried out with the support of the European Commission will be discussed, as well as a possibility for a joint participation in them and individual meetings according to various interests. The Economic West-East Network (EWEN) Project is a structure whose mission is to establish lasting and specific plans for a balanced economic cooperation between the countries of the European Union and the countries of Central and Eastern Europe, as well as those of the Organisation of the Independent Soviet Republics. EWEN offers a simultaneous development of the three constituent elements as follows:
EWEN’s organisational structure is:
First, EWEN has chosen the following 6 countries: Russia, Polans, Goergia, Rumania and Lithuania. The Forum for cooperation of the European Commission -Bulgaria should be considered not only as a promotion of the programs for research and development, and new technologies in the country, but as a step towards its technological and industrial development through investments, import-export, scientific and technological exchange, etc. In view of the middle-term plan, the organization of the Forum aims at the preparation and establishment of a permanent cooperation along these lines between the European Commission and Bulgaria. This is why BCCI shall support it and shall participate in its organisation.
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The Turkish Bank Ziraat Bankasi will open a branch in Bulgaria by the end of June. As of the beginning of 1998 till now Turkey has invested US$30MM and by the end of the year most probably the investments will amount to US$100MM. In 1997 the Turkish investments amounted to US$14MM. 1712 sole trader and joint Bulgarian-Turkish companies have been established as of the end of 1997.
According to the European Commission in Brussels, the results from the economic reform in Bulgaria are optimistic. They proceed from the functioning of the Currency Board and speeding up of privatization. In 1997 the production has been reduced by 7.4%. The prognosis for 1998 is a reduction of approximately 3-3.5%. Privatization of small and medium enterprises is a key goal. Up till now enterprises have been purchased by managers and workers or by the population through shares. However, a major part of them have gone bankrupt because of a lack of capital.
The METRO INTERNATIONAL Group shall build 8 hyper-markets in Bulgaria and the first two, in Sofia and Plovdiv, shall be opened during the first half of 1999. Goods will be traded “cash and carry” and each store will offer approximately 4,000 items of foodstuff and 6,000 items of other consumer goods. The investment project amounts to DEM 181 million and it will be carried out by METRO CASH AND CARRY-BULGARIA INC. which has been registered with a fixed capital of DEM 10 million. According to the plan of the company, the last of the 8 hyper-markets will be ready by 2002.
Experts from one of the biggest Chinese companies for electric appliances will arrive in Bulgaria for talks with the MRAZ Company in order to explore the opportunities for production of air-conditioners and freezers in Bulgaria. Annually the Bulgarian Company “VLADIMIR DISTILLERRS COMPANY” will export 4000 tons of red wine to China. It has concluded already a contract for the sale of 110000 bottles of wine. There is an offer from China for the establishment of a joint venture seated in Bulgaria for the production of medicine.
A Bulgarian-Austrian Center for promotion of small and medium enterprises will be opened in Sofia in November this year. It will offer consultancy and assistance for attracting foreign investments.
Bulgaria was affiliated to the European Federation of the Inner Ports through the participation of Port Varna and Port Rousse. The participation of Port Varna will increase the volume of transit flows through the Rein-Mein-Danube corridor from Rousse towards Varna to OIC and the Far East.
Three Bulgarian banks are included in The Bankers’ rating of the 100 banks of Central Europe. These are Bulbank (27th place), Express Bank (53rd place) and UBB (66th).
At the beginning of June the session of the Joint Bulgarian-Russian Commission for economic cooperation will be held. It coincides with the working visit of the Prime Minister, Mr. Ivan Kostov, to Russia. The problems of Russia’s interest for the petrol pipe-line Burgas-Alexandropoulos will be discussed, after which negotiations with the Greek party on the share participation, shipment, financing and terms for construction of the object will be held.
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