Nine companies purchased tender documents for the Bulgarian Railways, but only four submitted bids in compliance with the pre-qualification requirements. What is now forthcoming is another round in the sale of 2,325,087 shares, representing 100% of the capital of BDZ – Freight AD. All of these shares are owned by Railways Holding EAD. This is the second attempt to sell the railway carrier. The criteria were edited and reduced to make it more accessible to deal with on the part of the candidates. It is expected to cost around 100 million levs as the last (for now informal) evaluation of the public company.
The new owner is expected to pay more than 114 million in debts of the company. This money will be used by the current major shareholder BDZ Holding which will continue to pay off the chain of debts and bank loans.
The debts of the company, its depreciated assets, as well as the commitment to maintain the number of staff and the need for large investments for rehabilitation and development were the major reason for strategic investors to refrain from participation in the contest. Despite the seemingly large number of players one must admit that this is just another privatization process that does not cause any interest and did not result in attracting any major international companies in this sector.
After the first screening to the list of interested candidates remained TD Group Feroviar Roman SA – Bucharest, Bulgarian Cargo Express PLC; Donau-Finanz Transport Beteiligung GmbH of Austria, and First Investment Bank – Sofia. Among the potential buyers the name of only one company is related to strategic expertise in railway services – the Romanian one.
Until February 18 the listed companies can buy the information memorandum and the Privatisation Agency must issue registration certificates to the eligible among them. They will be able to continue to explore the assets and finances of BDZ – Freight Transportation.
The largest rail carrier in Romania – TD Group Feroviar Roman AD headquartered in Bucharest, bought documentation again. The company took part in the first competition procedure. It has the most experience in the industry, and is the owner of the biggest competitor of BDZ – Freight in the country – the Bulgarian Railway Company. Logically, this is the most preferred candidate in view of its ability to invest and develop the troubled freight carrier. The company’s revenues in 2011 were 187 million.
Bulgarian Cargo Express AD, based in Sofia, has a direct link with the Navigation Maritime Bulgare. The scope of its business is related to the performance of rail freight in the country and abroad, hiring of traction and rolling stock for rail haulage, maintenance and repair of locomotives and wagons.
In the board of directors are brothers Kiril and Georgi Domuschievi. Kiril Domuschiev developed transport business and is co-owner of the German-Bulgarian consortium KG Maritime Shipping, who was in the late summer of 2008 privatized Navigation Maritime Bulgare. The brothers have pharmaceutical companies (Huvepharma, Biovet), invest in real estate and other industries.
The BANKER
