ECONOMY

Bulgarian airline for sale

SOFIA (Reuters) – Bulgaria’s Privatization Agency said yesterday it planned to sell this year at least 51 percent of the new national flag carrier, Balkan Air Tour, which replaced insolvent Balkan Airlines. The agency has prepared a sell-off strategy that envisages selling another 25 percent on the fledgling local bourse after the privatization of a majority stake, its spokeswoman Anna Ruscheva told a news conference. The strategy has yet to be approved. Both agency officials and aviation analysts say it will be tough to secure a sale, given the downturn in the global aviation sector. «The likelihood of attracting a foreign airline as an investor is not very big. That’s why we also plan to allow financial investors or consortiums of strategic and financial investors to take part in the privatization,» Ruscheva said. Strategic investors will have to show at least 100 million euros in revenues from their main operations over the last three years, while financial investors should manage funds worth at least 200 million euros, she said. Balkan Air Tour would be sold through a two-stage public auction. Investors must state the precise majority stake they are seeking, provide financial guarantees and present a five-year business plan for investment and employment. Balkan Air Tour launched its first flight in December after the Sofia City Court halted Balkan Airlines’ activities and ordered its liquidation, putting the airline out of its misery after nearly two years in receivership. Balkan Airlines’ biggest creditor, the Bulgarian government, rejected a plan to revive the carrier, whose debts exceed $90 million. Balkan’s liquidation is part of a Transport Ministry plan for the new carrier to inherit the old company’s assets, destinations and staff, but not its debt. The ministry won permission from national aviation bodies of 16 states in Europe and the Middle East for the new airline to operate destinations previously covered by Balkan. Balkan Air Tour now uses a government-owned Tupolev TU-154 aircraft and two Boeing 737-300s, which Balkan Airlines had leased from Germany’s Lufthansa. In the 1990s, Balkan Airlines’ 30-strong fleet flew to more than 50 destinations.