BTC bids submitted; government to name winner in two weeks’ time

SOFIA (Reuters) – Bulgaria’s Privatization Agency said yesterday it would name a preferred buyer for state telecoms monopoly BTC within two weeks, and then hold talks to finalize the country’s top privatization this year. The auction, seen as a key test for the reformist cabinet’s bold sell-off plans, attracted only two offers last month. London-based equity fund Advent led the cash part of the bid with an offer of 200 million euros ($195.8 million) for 65 percent in BTC, while industrial group Koc Holding and its partner Turk Telekom offered 185 million euros. A spokeswoman for the agency, which is being advised by Deutsche Bank on the BTC sale, said both candidates had submitted the additional information requested to clarify their offers, ahead of a deadline of 11.00 GMT yesterday. «The Privatization Agency will analyze the offers in detail and will prepare a report that will be submitted to a government group in charge of the sale,» said the spokeswoman. She said the report will also analyze whether there were circumstances that could lead to seeking improved bids, but did not elaborate. Under Bulgaria’s sell-off legislation, the agency has the right to seek one-off improvements to the final bids if it considers all offers unsatisfactory, or if there is a change in the financial state of the company being privatized. Recent statements by senior cabinet officials indicated a lack of cohesion among state authorities on how to proceed with the BTC sale, repeatedly delayed by previous administrations. Transport and Communications Minister Plamen Petrov has said he was disappointed with the final bids, which were 50 percent to 70 percent lower than what he had expected, adding he would back any move by the agency that could lead to higher bids for BTC. Petrov also said his ministry had an alternative plan for BTC’s development in case a deal was not finalized. Other ministers, including Economy Minister Nikolai Vassilev, who heads the government group in charge of the BTC sale, said the offers were a success given a global telecom sector slump. Both BTC candidates pledged to invest 400 million euros in it over five years to raise the company’s digitalization and an additional 50 million euros to increase BTC’s share capital. The bid by the Turkish consortium envisages cutting BTC’s staff to 20,530 in three years from some 24,800 now, while Advent will cut staff to a more demanding 16,000 in three years. The size of the cash bid will account for 80 percent of the offer’s success chances, the sell-off agency has said. Proposals for BTC’s staff will account for 15 percent, and additional investment planned by end-2006 will make up 5 percent. At present, BTC has 112 telephone lines per employee, compared with a central European telecoms average of 240 lines, and serves 35 percent of the country’s population of 8 million.