PPC bid upheld in Bulgaria

SOFIA (Reuters) – Bulgaria’s supreme administrative court upheld a ruling yesterday allowing Greece’s Public Power Corporation (PPC) to buy 100 percent of the Bobov Dol power plant in a privatization that was halted last year. PPC was the highest bidder, offering 105.2 million euros ($132.5 million) in cash and investment, for the 630-megawatt coal-fired plant, but Bulgaria’s previous centrist government scrapped the tender, saying the price was too low. Yesterday’s ruling removes a major hurdle in the sale, one in a string of privatizations that have been bogged down by legal challenges and have hurt Bulgaria’s efforts to attract investment ahead of the country’s planned entry to the European Union in 2007. The ruling upheld an earlier decision which had overturned the sale’s cancellation. It cannot be appealed and gives a green light for PPC to proceed with the sale, in line with the desire of the current Socialist-led government, which has said the sale was wrongly stopped. The court said that according to a report from consultancy Ernst & Young valuing Bobov Dol at 130-607 levs per share, PPC’s offer of 564 levs per share was well within the price range. It said the privatization agency’s decision to scrap the sale had been outside its authority and that its criteria of a minimum price was unacceptable. «The only criteria in the tender documentation was price per share, and the companies were to be ranked according to that. There was no such condition as minimum price,» the court said. PPC could not immediately be reached for comment. The company outbid its only other competitor in the deal, Italy’s Enel, which offered only 149,000 euros. «Now we will continue with the process. We’ll announce PPC as the winner. I can’t promise a concrete date, but the process will be relaunched as soon as possible,» said Todor Nikolov, executive director of Bulgaria’s privatization agency. The sale has sparked controversy in the poor Black Sea state of 7.7 million, as the 2,700 miners supplying the plant fear heavy layoffs as PPC is obliged to buy local coal for only a limited time.

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