ECONOMY

Prosecutor calls on Bulgaria’s Supreme Court to annul BTC sale

SOFIA (Reuters) – The Bulgarian chief prosecutor’s office yesterday urged the country’s Supreme Court to declare invalid a 200-million-euro ($202 million) planned sale of state telecom firm BTC to London-based private equity house Advent. The move is set to further delay the landmark telecom sale, which Simeon Saxe-Coburg’s government needs to raise much-needed foreign cash in one of the poorest European Union aspirants and boost investor confidence in its commitment to reforms. On Friday, the prosecutor’s office suspended the BTC sale following an appeal by the main opposition, the center-right UDF, to examine alleged procedural irregularities. The chief prosecutor’s office said that Advent’s acquisition vehicle, Viva Ventures, had not been properly registered and that the BTC sell-off did not meet legal requirements for a «transparent and economically effective» privatization. «The severity of the violations makes the (Privatization) Agency’s decision invalid,» the chief prosecutor’s office said in a statement which was faxed to Reuters. The Privatization Agency, which has said the procedure meets all legal requirements, said it would comply with the ruling of the Supreme Court, which will convene for a session tomorrow. Government officials have warned that suspension of the sale could mar the country’s investment image and put off investors considering participation in future Bulgarian privatizations. Advent officials were not available for comment yesterday. The equity fund has been selected as the preferred buyer, with an offer of 200 million euros for 65 percent of BTC. Advent, which bid through fully owned Vienna-registered company Viva Ventures, plans to slash BTC’s work force to 16,000 within three years from about 24,800 now and pledges to invest 400 million euros in BTC over five years to upgrade its network. The UDF has said that Viva Ventures was not registered at the time it received its certificate for participation in the BTC tender. But Viva’s lawyers and the privatization agency say that Bulgarian privatization law allows companies in the process of registration to take part in such sale procedures. Advent’s offer has triggered a high-profile debate about whether the sale should go ahead. The opposition, trade unions and even some officials say the price and the planned investment were too low, while planned job cuts were too steep. UDF officials say it would be a crime to sell the telecom firm, whose net profit rose by 43 percent to 241 million levs ($124.94 million) in 2001, for such a low price. The government blames the previous UDF administration for failing to reach a deal for BTC two years ago. In 2000, at the height of the telecoms boom, the UDF government rejected a bid of $610 million for 51 percent of BTC, including a GSM license, placed by Greece’s OTE and Dutch firm KPN.