THE Government was scheduled to discuss at its regular meeting on August 19, the long-anticipated strategy for the privatisation of the national flag-carrier Bulgaria Air. The proposed strategy documents were prepared by the company's management months ago but have been pending the Ministry of Economy's opinion. The new strategy provides for the application of a more flexible privatisation procedure, under which a publicly announced two-stage competition will be held, Government spokesman Dimitar Tsonev said. The adoption of the new strategy was necessary, after the company's performance stabilised and improved. The company reported a 1.5 million leva profit after taxes for 2003, compared to a loss of 871 000 leva in 2002. Bulgaria Air currently operates eight airplanes, while there were only two in 2002. The number of destinations has also increased from 12 to 18 in the past year. Strategic and financial investors are expected to submit bids. Strategic investors are considered to be Bulgarian legal entities, registered under the Commercial Code, where the holders of over 50 per cent of the capital have reported revenues from aviation services of over 100 million euro in the past financial year, Tsonev said. A financial investor is a Bulgarian legal entity registered under the Commercial Code, in which over 20 per cent of the capital is in the hands of a company that manages financial assets worth over 200 million euro, or owns over 200 million euro worth of equity in other companies. Financial investors will only be allowed to participate in the event that no strategic investors turn up. In any case, the majority stakeholder in Bulgaria Air should be a Bulgarian or EU-member, legal entity or individual. The buyers will not be allowed to dispose of their equity in the flag-carrier before 1 January 2007, nor will they be allowed to let the company slip into insolvency or liquidation until that date. The investor should also come up with 20 million leva, needed to reach the registered capital of 30.16 million leva. Analysts said that the main requirements for candidates remain unchanged compared to the old strategy, which was used in the privatisation of Balkan Airlines. The only new requirement is that the investor will have to show experience in the field of aviation, the chairman of the parliamentary committee on transport Yordan Mirchev said. According to another MP, Blagoi Dimitrov, special attention will be focused on the consultant company handling the deal, since in the last procedure there was a conflict of interests. Bulgaria Air was established in late 2002 to replace the former national carrier Balkan Airlines, which went bankrupt after being bought by the Israeli Zeevi Group. -Business staff