Balkan Airlines settlement?

SOFIA (Reuters) – Bulgaria’s government announced yesterday it was in talks to reach a settlement in a dispute with the majority owner of debt-laden flag carrier Balkan Airlines to help attract an investor to resume full-scale operations. The airline was grounded in February due to a row between the government and Israel’s Zeevi group, which owns 75 percent. A Sofia court launched insolvency proceedings against Balkan in March and appointed administrators, who agreed to allow the resumption of some flights while at the same time seeking an investor. The Israeli side sought a contact with us. Hard and complex negotiations are under way, and I think it would be good for our position not to put the issue on the front pages, Transport and Communications Minister Plamen Petrov told a news conference. If we succeed in resolving the legal problem, I think there are good opportunities for someone to make a good investment, he said. We want Balkan Airlines to restart operations and obtain the necessary investment as soon as possible. Investors from Italy, Canada, Korea and a company set up by two Russian airlines have already shown interest in acquiring an airline in Bulgaria, said Petrov. There are not so many airlines (for sale) in Bulgaria, so they can show interest in Balkan if they take it for granted that the legal problem will be resolved. They will declare their interest when we have something to offer them, he said. Petrov also said that two weeks ago the court-appointed administrators submitted a $18.5 million claim against Zeevi related to Balkan’s shares in the airline industry information technology cooperative SITA. Under the privatization contract for Balkan signed in July 1999, Zeevi was to sell Balkan’s interest in SITA to cover Balkan’s debt, mainly owed to the state. The market price of that stake was estimated at between $30 and $50 million at the time by Bulgaria’s Privatization Agency.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.