Archive for November, 2006

SBS Broadcasting successfully acquires a major Bulgarian radio station – Radio Express

Wednesday, November 15th, 2006

Borislav Boyanov & Co. advised SBS Broadcasting (the second largest media company in Europe) in connection with its recent successful acquisition of Radio Express. Previously the firm advised SBS Broadcasting in connection with the transactions for the acquisition of another four major radio networks (Radio Vistosha, Radio Atlantic, Radio Ritmo, Radio Vesselina) and a music TV channel in Bulgaria (Vesselina, renamed after acquisition in Voice TV).

Borislav Boyanov & Co. advised a major foreign bank in connection with EUR 90 million financing of office development acquisition

Saturday, November 11th, 2006

Borislav Boyanov & Co. advised a major foreign bank on an almost €90 million financing of the acquisition of a big office development by a US investment fund from its current owner. Following the disbursement of the facility at the end of 2006 Borislav Boyanov & Co. continues to advise the bank on its securitization.

More acquisitions of Warburg Pincus in Bulgaria followed by their refinancing

Saturday, November 11th, 2006

Borislav Boyanov & Co. assisted Warburg Pincus on the refinancing of its Bulgarian acquisitions, within the scope of larger refinancing transactions covering several East and South European jurisdictions with total value above EUR 285 mil. Different aspects of this major restructuring are still on-going.

Competition Day

Friday, November 10th, 2006

On 9 November 2006, Managing Partner Borislav Boyanov and lawyers of Borislav Boyanov & Co. took part in a seminar organised on the occasion of the first ever Competition Day held in Bulgaria. The event was organised by the Commission on the Protection of Competition, along the style of the European Competition day, and coincided with the 15th Anniversary of the establishment of the Bulgarian Commission. Among the attendees were the heads of competition authorities of 17 EU member states, Bulgarian Ministers, the Chairman of the Supreme Administrative Court, EU and Bulgarian Commission officers, prominent practitioners in the field of competition, representatives of business etc.

Managing Partner, Borislav T. Boyanov, the only Bulgarian speaker at the conference representing the business community, delivered a report on the relationship between Bulgarian Business and the Commission for the Protection of Competition. The full text of the speech is available below:


Ladies and Gentlemen, Dear Colleagues and Friends,

Bulgaria has been building a liberal economy for over 17 years now. Competition and free business initiative are of vital importance in this process. This importance was so succinctly expressed in Neelie Kroes’ speech before the European Parliament made in November 2004: “A healthy competitive market place guarantees the best possible deal for consumers and businesses alike. … Businesses get a predictable and fair framework for investment and returns. They can reach their full potential for fundamental research and for development, for innovation and for growth. Consumers get a wider range of high-quality goods and services at lower prices. They benefit from more choice, better returns on their investments and new products and services. And society in general benefits through the increased opportunities for wealth creation.”

Similarly to other countries having formerly centrally planned economies, Bulgaria has learned first hand the consequences of a monopolistic, non-competitive economy – lack of efficiency and innovation, waste of public resources and stagnation, which, as we have all seen, bring about mass impoverishment and stop the development of society. Bulgarian society has made great efforts to overcome this heritage and this process has reinforced competition as one of the fundamental values within the concept of a harmonious economic development.

Within the framework of that process, the Commission on the Protection of Competition, as a specialised and independent state body, was faced by a number of challenges. On the one hand, it stood up before other state authorities as a champion for liberalisation in many sectors of the economy, these sectors having inherited a high degree of concentration and, respectively, a low degree of efficiency. Although results of this process are in place in many economic sectors, the role of the CPC is still far from being over. The Commission has the challenge to advocate before all other institutions the continuing process of liberalisation and to counter re-emerging ideas for a new centralisation or re-concentration in certain sectors. In this aspect, we would like to wish the CPC courage and perseverance and to restate the support of businesses for this important function of the CPC.

On the other hand, the Commission has been increasingly asserting itself as a regulator of competition within a dynamically developing business environment. Here, problems arose mainly from two directions. On the one hand, the lack of an established business culture, at least at the beginning of the transitional period, as well as poor knowledge of the rules of competition on the part of business and society as a whole, brought about some of the unavoidable mistakes of youth. On the other hand, the still existing state monopolies had a negative collateral effect on private business. In this respect, the CPC in addition to continuing its existing function of enforcing competition rules and facing the new challenges of applying European antitrust legislation, has also the fundamental task of educating society and business about these rules in order to improve their implementation without the necessity for intervention on its part. Obviously, prevention is much better than cure in building a stimulating and healthy environment for business.

The past 15 years have witnessed a continuous process of mutual education and development towards a more profound understanding and implementation of competition rules by businesses and by the CPC. This has been a two-way process and presently the Commission has an ever improving understanding of the problems facing business. The CPC continues to assert itself as a modern administration that has turned its back on the command-administrative approach of the past and regards regulation more and more as a dialogue with businesses resulting in reasonable and practical solutions to the benefit of business and society, rather than as a process of issuing formalistic and inapplicable dogmas. There should be no doubt that the role of the CPC is primarily to guarantee the development of an efficient, vibrant and dynamic economy by creating a fair and competitive environment. This role is inseparable from the implementation of a highly practical regulation directed towards the minimum necessary restriction of natural economic processes.

On the eve of Bulgaria’s accession to the EU, the protection of free competition and of free business initiative is emerging as a major priority also for business in its preparation for compliance with Community Law. It is vital that economic operators are well aware of the legal prohibitions on agreements and concerted practices restricting competition and on abuse of dominant position, as well as the provisions under Art. 81 and 82 of the EC Treaty. A better understanding of this field of law will contribute to the continued strengthening of market economy.

Being well aware of that, in 2005 the Union of Employers in Bulgaria (UEB), the Bulgarian International Business Association (BIBA) and some other employer organisations signed an agreement for cooperation with the CPC with the purpose of strengthening their interaction through the exchange of information, mutual consultations and expert assistance, setting up of working groups for joint initiatives, including the drawing of new legislative acts, organisation of joint seminars and other projects. The content of this agreement has been enriched and it will be re-signed by the newly established Confederation of Industrialists and Employers in Bulgaria (CIEB).

In 2005, BIBA and the UEB, together with TAIEX and the CPC, organised a seminar about the implementation of the provisions of the Protection of Competition Act with respect to the block exemption of certain categories of agreements. At that seminar, representatives of business were practically informed about enforcement and specific issues arising from the provisions related to block exemptions.

On an initiative by the CEIB and the American Chamber of Commerce and as a result of the fruitful cooperation with the CPC, CPC’s practice changed with respect to marketing promotions. The Commission adopted more liberal criteria on the definition of the concept of “considerable value”, which ensure an acceptable balance between the interests of producers and distributors on the one hand and consumers on the other, do not create artificial obstacles before business initiative and take into account the changing market conditions.

The Commission has demonstrated its willingness to participate also in other forms of cooperation. Thus, for example, the conference Competition in Bulgaria. Perspectives of Accession took place in Sofia in May of this year. The conference programme, whose overall aim was to inform business, was prepared and fulfilled with the active participation of the CPC, officers of the European Commission, and law firms from Sofia and Brussels. There is no doubt that such forms of cooperation should continue and intensify in different formats.

It is by no chance that by means of the latest amendments to the Public Procurement Act and the new Concessions Act legislators have placed substantial trust in the CPC, assigning to it new functions related to reviewing appeals against authorities and persons liable according to the relevant procedures. It is evident that the CPC has established itself as a champion of free and fair competition, publicity, transparency and equal treatment in procedures of substantial public interest. The significance of that role can be seen, taking into account the billions of Leva, in respect of which concession procedures and, especially, public procurement procedures will be carried out during the coming years. Businesses are ready to cooperate with the CPC not only to establish the best commercial practices but also, in this particular case, to fight corruption and reinforce the rule of law in the economy.

What are the challenges facing business and the CPC?

Firstly, this is the increasingly profound understanding of the economic basis of competition rules and their enforcement in accordance with their true meaning. Certainly, that should not be done at the expense of infringements of other fundamental values, rights and freedoms guaranteed by law, such as the right of ownership, intellectual property included. The right to free competition is only a part of the overall legal system supporting the pillars of society and the use of that right should not be at the expense of rights and processes protected by law, because such rights and processes are also to the benefit of society and they encourage its economic and technical progress.

Secondly, this is the further development of the dialogue between the CPC and business in the process of applying competition rules. What is meant is not just the dialogue taking place in principle and on a high level, at forums like this one, but also the dialogue that takes place daily in the process of application of the law. It is only by examining the arguments of both sides to this process that the right decision in line with the objectives of competition law could be reached for each specific case. Here, the CPC faces the continuous challenge of training and educating the staff of its administration in that process so that they can maintain the habits of a fair and open administration.

Thirdly, this is the further strengthening of a due and fair administrative process in which all parties are given more opportunities to participate at all stages. Due administrative process is not an asset in itself; it is a way to improve the quality of enforcement and efficiency on the part of the CPC, the result of which are effective acts on the application of the rules on competition. In this aspect, I think, the CPC can follow the valuable example of the European Commission that has also walked the road in this direction and took many steps to make the process of applying the rules on competition more transparent and discursive. Part and parcel of the development of this process are also the principles and recommendations of the International Competition Network (ICN), whose members include the CPC, the European Commission and a number of national competition authorities. These principles call for efficient and timely enforcement, without imposing burdens on the parties disproportionate to the purposes of regulation.

Last but not least, I would like to congratulate the Commission on the Protection of Competition, all its members, and the administration for their tireless work, over the last 15 years, to protect and create conditions for the development of competition and free economic initiative. The values that you defend are values for the majority of business in this country and you can rely on business as a partner in the striving to develop an efficient economy in Bulgaria. I would like to wish you sincerely the best of luck in the enormous challenge of the application of European anti-trust rules as of 1 January 2007, a process in which you will undoubtedly enjoy the active support of the European Commission and the other competition authorities of member states. The road travelled so far has been long, but this has been the right one. The journey continues, however, and I am positive that the CPC has the resources and will meet brilliantly the challenges of the future. Good luck!