SOFIA (AP) – In a potential setback to private investors, a government-sponsored agency yesterday canceled the planned sale of a majority stake in the state telecommunications company. The government last month had agreed to sell a 65 percent stake in the state-owned Bulgaria Telecommunications Company to a US-British equity fund. The deal had to be approved by the Privatization Agency to be valid. In rejecting the sale, Petko Nikolov, chairman of the agency’s supervisory board, cited irregularities, adding that his agency and the prospective buyer had «failed to agree on essential elements of the deal.» Viva Ventures Holding GmbH, a Vienna-based unit of the US-British equity fund Advent International, had offered 260 million euros ($286 million) and pledged to invest another 700 million euros ($770 million) in the next five years. But Nikolov said that the proposed investment plan puts the bulk of the funding close to 2008. The government would prefer the investment to be spread more equitably over the five – year period. Nikolov said the board found «technical irregularities» in the papers submitted by Advent and believes some of Advent’s conditions – like a plan to use offshore companies to buy stakes in BTC – are unacceptable. The only other bidder was a consortium of Turk Telecom and Turkish industrial conglomerate Koc Holding AS, which offered 235 million euros ($258 million.) It was not immediately clear if the government would start negotiations with the Turkish firm or completely reopen the bidding. The telecommunications company is one of Bulgaria’s most lucrative assets in terms of value and profitability, and its privatization is seen as a benchmark for the pro-Western government’s ability to press ahead with reforms. Last month, the government canceled an earlier announced sale of 80 percent of Bulgaria’s state tobacco monopoly, Bulgartabak Holding AD, to a Bulgarian-Dutch consortium led by Deutsche Bank. Officials argued that the transaction would not be beneficial for the country.