NU IMAGE Bulgaria and the Privatisation Agency (PA) signed on January 24 the contract for the sale of Boyana Film studios.
This was the second signing of the contract. The first one was initialled on June 24 2005 but a series of additional clauses were imposed by the PA before the deal was approved by the agency’s supervisory board.
In terms of the newly initialled document, Nu Image will pay 12 223 937 leva for 95 per cent in Boyana Film. However, to become the owner of the studios, the US company would have to comply with two conditions, said PA executive director Todor Nikolov.
The first is that the land of Boyana Film, an area of 53 hectares, which was taken out of the assets of the studios and transferred to the Culture Ministry, should now be transferred to the state-owned company Audiovideo Orfei. The second is to sign a mortgage on the land, which will become ownership of Nu Image for the price of 300 euro a sq m (about three million euro a hectare).
David Varod, head of Nu Image Bulgaria, who signed the contract together with Nikolov, said the big winner in this deal was the Bulgarian cinema industry.
“We will win too, of course, but the Bulgarian cinema is the big winner,” he said.
After the signing ceremony, Nikolov said he could not say when the new owner would actually take ownership. The procedures for complying with the conditions would depend on many institutions, so an effort should be made to avoid a major delay, he said.
This appears to mean that the re-signing of the contract has not in any way changed the current status of the studios.
Nu Image placed the highest bid of 12.2 million leva (about six million euro) for 95 per cent in Boyana Film in the tender held in February 2005, and pledged to invest a further 30.5 million leva (15 million euro) to upgrade the facilities of the studios. In late June, the PA declared Nu Image the winner of the tender and signed a preliminary privatisation contract with it.
But the state has not yet enacted the agreement. In December last year, Culture Minister Danailov said that he had asked the PA to negotiate a change to the deal, requiring Nu Image to maintain the core activity of the filmmaking studios for 20 years, rather than the 10 years envisaged in the preliminary contract. Nu Image would also be banned from transactions involving the land on the outskirts of Sofia - where the film studios are based - for 20 years. This was double the term specified in the preliminary contract, Danailov said.
Nu Image, however, accepted the amendments and awaited final approval by the PA’s supervisory board, which came on January 13.
Several Bulgarian filmmakers have opposed the deal from the very beginning of the privatisation procedure.
In the past two weeks, they took a series of actions to attempt to block the signing, including petitions to the prosecutors’ office, to Parliament, the Culture Minister and the PA.
Filmmakers have been claiming that the selection of Nu Image was not in the interests of Bulgarian cinema. They have consistently claimed that the PA has been favouring Nu Image, which according to the professionals had used Boyana Film to make films for years, but had no high-quality productions shown in cinemas.
In a letter to the PA and its head Nikolov on January 24, just hours before the signing ceremony, filmmaker organisations asked the agency to halt the procedure, claiming the deal would cause losses to the state amounting to at least 40 million leva. They said that their calculations had shown that the loss would result from the transfer of a series of movable and immovable properties of the studios to Nu Image.
“If you do not postpone the signing of this humiliating contract we will consider that you are deliberately damaging the Bulgarian state and are becoming an accomplice to this long prepared robbery,” the letter said.
The Association of Bulgarian Cinema Producers, through its chairperson Georgi Cholakov, and the Bulgarian Association of Cinema Directors, through chairperson Radoslav Spassov, signed the statement.
Varod refutes the allegations of the group of filmmakers protesting the deal. In an interview with The Sofia Echo in December last year, he said he did not believe that the filmmakers criticising him and the deal with Nu Image were impartial. They - the directors and other professionals - were just like ghosts from the past of Bulgaria’s film industry, he said.
