Archive for October, 2004

The Government Adopted Strategies for Privatization of the Bulgarian Navigation Maritime and the Bulgarian River Navigation

Friday, October 29th, 2004

On October 28, 2004 the Government adopted Privatization Strategies which provide for the sale of 70% stakes of the share capital of the national state-owned companies Bulgarian Navigation Maritime and Bulgarian River Navigation. The remaining 30% will be offered for trade on the Bulgarian stock exchange. The two-stage privatization procedures will be opened to both strategic and financial investors. It will be required from the financial investors to manage financial assets at the amount of over €200 mln. and to be registered in Bulgaria or in a EU Member State or, alternatively, to incorporate a special purpose company in one of those countries. It will be also required that the winning candidate must not register the existing ships of the company under a foreign national flag within a 5-year period as of the closing of the privatization deal. The same shall apply to ships acquired within that period. According to information available in the press the average age of the NMB fleet is 23 years versus an industry average of 14 years. The requirement applicable to the candidates for Bulgarian River Navigation will be specified in the tender documentation. For more details please contact Mr. Damian Simeonov at d.simeonov@boyanov.com.

The Privatization Agreement for the Southeast Pool of Electricity Distribution Companies Was Signed

Friday, October 29th, 2004

The privatization contract for the sale of 67% in the electricity distribution utilities Stara Zagora and Plovdiv covering the Southeast part of Bulgaria was signed today between EVN AG, Austria, and the Privatization Agency of the Republic of Bulgaria at an official ceremony at the Council of Ministers of the Republic of Bulgaria. The purchase price for the two companies is €271 mln. 20% have been paid today. The remaining 80% are to be paid at the completion of the transaction, which is to occur after the competition authority of Bulgaria clears the deal. Borislav Boyanov & Co. has advised the Bulgarian government on this deal as part of an international advisory consortium led by BNP Paribas. The deal and the privatization process have been estimated by EON Energie AG as very transparent, swift and professionally done. For more details please contact Mr. Damian Simeonov at d.simeonov@boyanov.com.

The Privatization Agreement for the Northeast Pool of Electricity Distribution Companies Was Signed

Thursday, October 28th, 2004

The privatization contract for the sale of 67% in the electricity distribution utilities Varna and Gorna Oriahovitsa covering the Northeast part of Bulgaria has been signed today between E.ON Energie AG, Germany and the Privatization Agency of the Republic of Bulgaria at an official ceremony at the Council of Ministers of the Republic of Bulgaria. E.On Energie AG and the Minister of Energy and Energy Resources of the Republic of Bulgaria have also executed a shareholders agreement with respect to the two companies. The purchase price for the two companies is EUR 140,700,000. 20% have been paid today. The remaining 80% are to be paid at the completion of the transaction, which is to occur after the competition authority of Bulgaria clears the deal. Borislav Boyanov & Co. has advised the Bulgarian government on this deal as part of an international advisory consortium led by BNP Paribas. The deal and the privatization process have been estimated by E.ON Energie AG as very transparent, swift and professionally done.

The Government Approved the Privatisation Agreement for the Sale of the Southeast Bulgaria Pool of Electricity Distribution Companies

Friday, October 22nd, 2004

The Government granted its approval of the privatization agreement for the sale of 67% stakes in the two electricity distribution companies grouped in the Southeast Bulgaria pool with EVN AG (Austria). The successful bidder offered €271 mln. for the 67% stakes in the Stara Zagora and Plovdiv distribution companies. Borislav Boyanov & Co. is a member of the consortium lead by BNP Paribas which advised the Government on this privatization deal.

Changes in the Tariff of the Fees collected by the Commission for Protection of the Competition

Thursday, October 21st, 2004

The Council of Ministers has adopted amendments to the Tariff of the Fees Collected by the Commission for Protection of the Competition (promulgated in the State Gazette Issue No. 93 of October 19, 2004). The amendments introduce a significant increase in the amount of the fees for opening of procedures and issuance of decisions collected by the national competition authority. The biggest increase relates to the fee for the issuance of a merger clearance which has now become proportional, being 0.1 percent of the combined aggregate turnover of the participants to the concentration for the preceding year but, in any case not more than BGN 60,000 (i.e. approximately between EUR 7,500 and EUR 30,000). This fee is due only if a clearance decision is issued, but not in the case of negative clearance or a prohibition. The fee for issuance of a decision for individual exemption of agreements, decisions or concerted practices caught by the prohibition of Article 9(1) of the Protection of the Competition Act will become BGN 2,000. The fee for filing a notification of a concentration will also be increased to BGN 2,000. The amendments are effective as of October 23, 2004.

Changes in the Work Permits Regime for Foreigners

Wednesday, October 20th, 2004

The Council of Ministers adopted an Ordinance (promulgated in the State Gazette Issue No. 92 of October 15, 2004) introducing amendments to the Regulation on the Conditions and Procedure for Issuance, Refusal and Revocation of Work Permits for Foreigners in the Republic of Bulgaria. Pursuant to the amendments a foreign employee of a foreign tour operator sent by his employer in Bulgaria with the purpose to exercise direct control and to coordinate the performance of the provision of tourist services supplied by the local counterparty – Bulgarian tour operator or hotelier, will be entitled to work without a work permit up to 6 months within a period of 12 consecutive months, only on the basis of a single registration with the Employment Agency.

The amendments also stipulate that work permits can be issued to:

• top management staff of a foreign legal entity having subsidiaries on the territory of Bulgaria, employed under the conditions of an intra-company transfer; and

• specialists of a foreign legal entity having subsidiaries on the territory of Bulgaria, with special expertise for production technologies, equipment and management techniques, employed under the conditions of intra-company transfer (in addition to that it is also required that the foreign specialists prove to have educational degree adequate to the position at issue).

Green Certificates

Wednesday, October 20th, 2004

According to information from the Ministry of Energy and Energy Resources, the so called green certificates will be issued to producers generating energy from renewable sources: hydro power plants, wind plants, solar collectors, biomass, etc. There will be quotas for production of electrical energy from renewable sources for all power producers. According to sources from the Ministry of Energy, after producers fulfill their quotas they will be able to sell the green certificates for the remaining amounts of their quotas to other power generators like thermal or nuclear power plants.

The Government Approved the Privatisation Agreement for the Sale of the Northeast Bulgaria Pool of Electricity Distribution Companies

Friday, October 15th, 2004

On October 14, 2004 the Government resolved to grant its approval to the privatization agreement with E.ON (Germany). E.ON will acquire the Northeast Bulgaria pool of electricity distribution companies – Varna and Gorna Oryahovitza. The successful bidder offered €140,7 mln for 67% stakes of the share capital of the distribution companies.

The Privatization Strategy for the National Flag Carrier Airline entered in Parliament

Friday, October 15th, 2004

The economy, transport, and telecommunications committees reviewed on October 13, 2004 the Privatization Strategy for the national airline Bulgaria Air proposed by the Government. Parliament is expected to approve the Privatization Strategy by the end of October. Pursuant to the document the flag carrier will be sold at a public two-stage tender; in the evaluation of the offers the offered price, investment program, reputation and relevant experience will be assessed.

Fourth Annual Lawyers Meeting of HeidelbergCement, Central Europe Held in Tallinn, Estonia

Tuesday, October 12th, 2004

The fourth regular Annual Lawyers Meeting of HeidelbergCement, Central Europe was held on October 7, 2004 in Tallinn, Estonia. The event aimеd to gather in-house counsels and outside counsels of HeidelbergCement AG from all jurisdictions in the region of Central and East Europe and provide them with the opportunity to exchange experience and know-how and strengthen relationships. Alexander Chatalbashev, Senior Associate with Borislav Boyanov & Co., made a presentation at the forum regarding the recent divestment of HeidelbergCement’s operations in Bulgaria – a complicated share sale transaction counseled by Borislav Boyanov & Co.