Bulgarian Railways, BDZ own 5.616% of the share capital of the insurance company Allianz Bulgaria, which will be sold to provide income for the struggling carrier. The decision of the Agency for Privatization to announce the contest was posted on November 8. Within ten days of its publication in the Official Gazette applicants may purchase tender documents against 10,000 levs. The same amount will cost the information memorandum of the company.
Eligibility requirements that potential buyers need to meet are high. They need to have at least 50% in at least two insurance companies, one of which is licensed for providing life insurance. The second condition is to have direct shareholdings or equity participations in other companies for a total of at least 65 million levs, with the revenue from them in 2010 and 2011 to be at least 35 million levs. The competition will not be open for consortia, offshore companies and individuals who have overdue public debts. All this suggests that the most likely buyer of the securities will be Allianz Bulgaria.
Privatization Agency explicitly explained that proceeds from the sale of the shares will go to the Railways. The idea is to use the money and the proceeds from the forthcoming second attempt at privatization of Railways’ Freight segment, to help rescue the company and repay part of its credit
The most urgent thing now is to settle financial relations with the German bank KFW, which in 2005 extended 190 million for the purchase of electric trains Desiro. Currently, the state rail operator has overdue obligations of over 41.4 million euro that it cannot repay. In the middle of last month, the Cabinet mandated the Ministry of Transport and Communications and the Ministry of Finance to enter into negotiations for rescheduling of loans.
The financial statements of companies railway companies for the third quarter are again in the red, but compared with the same period in 2011, but their losses are much smaller. The loss generated by BDZ is 11.11 million lev, and its annual reduction is 62 percent. The National Railway Infrastructure Company posted a a negative financial result of 18.3 million lev, but this is again an improvement of 43% compared to the corresponding period last year.
The BANKER
