Bulgaria approves plan for majority privatization of Soviet-era shipping

SOFIA – Bulgaria’s government has approved a plan to sell a majority in Navibulgar, one of the Black Sea’s largest maritime shipping operators, in a further push for structural reforms ahead of EU entry in 2007. Under the plan, the state will sell a 70 percent stake in the company, which owns 83 aging ships with a combined capacity of 1.8 million deadweight tons, to a strategic or financial investor, the cabinet said in a statement yesterday. The plan, which must be approved by Parliament and has no specific deadline, envisages floating the remaining 30 percent on Bulgaria’s stock exchange. Officials also approved a strategy to sell the smaller state-owned river shipping operator, Bulgarian River Shipping. «The two strategies will allow maximum funds to be allocated to the budget… and secure financing for the purchase or lease of vessels to allow the two companies to meet competitive pressure,» the government said in a statement. The government wants to continue the sell-off of state-owned firms begun last decade in an attempt to reduce the state’s influence in the former Soviet-style economy as it prepares to compete in the European Union’s single market. Officials have refused to say how much they expect from the sales, but media have reported the state is looking to earn 130 million levs ($85.02 million) for the 30 percent of Navibulgar to be floated on the bourse. That valuation would indicate the total company could be worth more than 400 million levs, or 200 million euros, if the majority stake is sold at a premium. The government said price would be the main factor for choosing an owner for the maritime operator, and it will also consider proposed investments. Navibulgar, which has 5,000 staff, reported a 40-million-lev profit for the first nine months of this year, versus a 27-million-lev loss for January-September 2003. The government has already sold a 30 percent stake in Bulgarian River Shipping for 10.9 million levs. The stake is controlled by Bulgarian-registered Alfa Finance Holding, which has expressed interest in buying the remaining stake. The river operator reported a profit of 221,000 levs in the first nine months of the year, after a 296,000-lev net loss last year.