Archive for March, 2004

Euroline Credit Cards Mark Their First Year on the Bulgarian Market

Friday, March 26th, 2004

The first anniversary of Euroline credit cards in Bulgaria was celebrated at a special ceremony in Sheraton Sofia Hotel Balkan organized by the issuer of the non-banking cards Bulgarian Retail Services (“BRS”). The Executive Director of BRS Mr. Karamanolis presented the credit products of the company and reported that since the issuance of the first Euroline card in 2003 BRS has already issued 75,000 cards and has installed over 1,500 POS terminals. Based on its first year achievements the company aims to establish itself as a leader in the credit cards’ operations in the Balkan region.

Borislav Boyanov & Co. advise BRS in their activity and the launching of their products in Bulgaria.

Bulgaria Hosts the Annual Meeting of the Board of Directors of American Standard Inc.

Wednesday, March 24th, 2004

The Annual Meeting of the Board of Directors of American Standard Inc. will be held in the town of Sevlievo where two of the largest sanitary wares factories in Europe, constructed by the American corporation – Vidima and Ideal Standard – operate .

At an official ceremony the Bulgarian President Georgi Parvanov awarded medals to Mr. Frederic Poses – President and Chairman of the Board of Directors of American Standard Inc. and Mr. Wilfried Delker – Ex-Executive Director of the corporation.

Borislav Boyanov & Co. assist American Standard, Inc. in their business in Bulgaria and act as their legal counsel since 1992.

The Final Stage of the Privatization of the Electricity Distribution Utilities Started

Thursday, March 18th, 2004

The Bulgarian Privatization Agency fixed May 25 as the final term for submission of binding offers for the privatization of the Bulgaria’s seven electricity utilities. The bids will be ranked only on their suggested price.

The selling procedures for the proposed 67% stakes in the electricity utilities pooled into three packages – Western Bulgaria, Southeast Bulgaria and Northeast Bulgaria will start simultaneously. The corporate records of the utilities will be available for review on the part of the bidders between March 17 and May 7 and the questions and requests related to the tender procedure will be accepted by the Privatization Agency until April 20.

Borislav Boyanov & Co. is a part of an international consortium led by BNP Paribas which advises the Bulgarian Government on the privatization of the electricity distribution utilities.

Liberalization of the Regimes for Real Estate Acquisition Accepted by the Bulgarian Parliament’s Economic Commission

Thursday, March 18th, 2004

The liberalization of the regimes for real estate acquisition by foreigners (except for the ownership on land) was recently undertaken by the Bulgarian Parliament’s Economic Commission by the removal of two restrictive clauses provided in the Bill on Amendment of the Foreign Investments Act (“FIA”). The proposal for the foreigners to be able to purchase real estate in Bulgaria without the prior Government’s consent was made by AmCham Bulgaria, BIBA and the Bulgarian – German Chamber at a public hearing held on March 4, 2004. Further, the Bill on Amendment of FIA no longer requires the prior approval of the Minister of Interior and the Minister of Defense for the acquisition by foreigners of inland property located in the vicinity of estates related to the national security. Although the final Parliamentary discussion on the bill is pending, the new legislative regime is expected to liberalize the acquisition regime for foreigners and to surmount the current difficulties arisen out of the unclear procedures for the acquisition of residential or land estates related to national security and located in districts near the national borders. Borislav Boyanov & Co. actively assisted AmCham in the preparation of its comments to the proposed amendments in the FIA and supported the proposal at the public hearing in the Parliament’s Economic Commission.

Morgan Stanley Signs Consultancy Contract with Bulgartabac

Monday, March 15th, 2004

On March 11, 2004 Bulgartabac Holding and Morgan Stanley & Co. Ltd. signed a contract for consultancy services necessary for the implementation of the Bulgartabac’s privatization strategy. According to the contract the consultant undertakes to prepare the financial, legal and market analyses of the holding’s subsidiaries and a review of Bulgaria’s tobacco legislation in order to propose schemes for sale of the subsidiaries. The contract provides for the payment of the consultant to fully depend on the successful sale of Bulgartabac’s subsidiaries. The privatization procedures for the subsidiaries which have attracted investors will start within three months after the signing of the contract and the unattractive companies will be restructured. In the implementation of the contract Morgan Stanley will cooperate with Freshfields Bruckhaus Deringer, a leading international law office experienced in consultancy on mergers and acquisitions in the tobacco industry.

Investment Incentives may be Abolished after the Bulgaria’s Accession in the EU

Monday, March 15th, 2004

The investment incentives provided by the current Bulgarian legislation may be abolished after 2007 in order to comply with the EU competition requirements. Recently the European commissioners recommended that the bill on amendment of FIA should be fully harmonized with the European law on provision of state aid or otherwise it may delay Bulgaria’s negotiations on the competition chapter with the EU. Currently the preferences are applicable only if approved by the Commission on Protection of Competition based on the provisions of the State Aid Act and its implementation regulations.

SEE Legal Meeting Held in Bansko

Monday, March 15th, 2004

SEE Legal held its most recent meeting on March 11-14 in Bansko where the member countries discussed future projects and cooperation. The meeting was attended by senior and junior representatives from Romania, Bulgaria, Albania, and Serbia and featured lawyers from Belgium and Austria. The meeting enjoyed great success.

Bulgarian Telecom Unsuccessful Bidder Doubts the Completion of Deal

Tuesday, March 2nd, 2004

On March 1, 2004 Bulgaria’s Privatization Agency (“PA”) informed the Turkish consortium Koc Holding/Turk Telekom that it was reimbursing its EUR 3 mln guarantee and that the privatization of 65% stake of Bulgarian Telecommunication Company (“BTC”) was finalized, although according to the law the deal is considered closed only after the shares are transferred to their new owner. The consortium was unaware of the PA’s reasons to officially remove the second candidate buyer, leaving with no alternative on the occasion that the telecom’s deal fails and insists that the Koc Holding preserves all legal rights until the shares are transferred.

As the issue of the third mobile operator license award is one of the crucial conditions and potential deal-breaker of the telecom’s privatization, the Bulgarian Government rehearsed moves should the Communications Regulation Commission refuse to grant a GSM license to BTC’s buyer Viva Ventures. In that case, Viva could obtain stretch out for the license through the mobile operator Mobikom, where BTC holds 39%. However, so far Mobikom refused having applied for a GSM license.

Borislav Boyanov & Co. has advised on the privatization of BTC since the first attempt to privatize the company in 1998-2000 to the Dutch KPN and the Greek OTE and is advising on the current privatization project.

State-owned Minority Stakes in 200 Local Companies Waiting for Investors

Tuesday, March 2nd, 2004

The Bulgarian Privatization Agency (“PA”) is on track to fulfill its promise to sell on the stock exchange all state-owned minority stakes in local enterprises by the end of 2004 after it so far managed to divest fully 200 equity packages and to partially privatize another 101. The transactions completed exceeded BGN 18 mln, including BGN 9.4 mln in cash payments. Another 300 minority packages were sold on the three auctions held so far in 2004. At least another two auctions are scheduled to be held by June when the investment vouchers expire. Some 500,000 Bulgarians hold vouchers eligible as payment instruments for the acquisition of state-owned equity floated on the exchange. Recently at the exchange’s session the privatization of Bulgaria’s heating industry was started.

Chelopech Mining AD Changes its Concession Contract

Monday, March 1st, 2004

On February 27, 2004 an Additional Agreement to the Concession Contract on Underground Mineral Riches – Gold-Copper-Pyrite ores mined from the Chelopech deposit, concluded between the Bulgarian Government and Chelopech Mining AD, a company acquired by Canadian Dundee Group, was signed.

Chelopech Mining AD, advised by Borislav Boyanov & Co. in its negotiations with the Government, managed to achieve various amendments in the Concession Contract aimed at a better protection of the lawful interests of the company under the Contract. As announced by the Executive Director of Chelopech Mining the investments are likely to reach the amount of US$ 90,000,000.

The amendments in the Concession Contract are expected to facilitate the operation of the Chelopech’s activity and the deposit’s long term survival and profitability, better remediation of the environmental damages and reduction of the operational risk to ensure sufficient level of protection of the environment and the vital interests of the local population.