The Privatisation Agency (PA) announced on October 12 that it had decided to allow only one company, German consortium KG Maritime Shipping (KGMS), to go on to the next stage of the procedure to privatise Varna-based Navibulgare EAD.

KGMS is bidding to acquire 70 per cent of Navibulgare shares.

The other two participants that sought to take part in the privatisation were Chartworld Shipping Corporation (CSC) of Athens, and Essar Shipping & Logistics Limited (ESLL) of Cyprus.

CSC is a ship management company and rents out ships. One of the reasons that CSC was not admitted to the next stage was that CSC does not charter freight ships in accordance with the requirements. The PA said that the competition rules did not allow independent participation by a ship manager unless the manager is a shareholder or a partner of a strategic investor that is part of a consortium.

ESLL was not admitted to further participation because it is a forwarding and logistics firm, and its documentation said that it would use its branch Essar Shipping Limited, India, to meet the qualification requirements. The PA said that this would mean a change of participant, a significant breach of the competition rules. In addition, ESLL was set up in 2006 and so could not show concluded ship charter contracts for the past three years, another obligatory condition in the privatisation competition.

KG Maritime Partners AD, Sofia, has a 70 per cent in KGMS, and trader Advance Properties OOD holds the remaining 30 per cent. Maritrade Shipping und Transport GmbH, Dusseldorf, has a 99 per share in KG Maritime Partners AD, and ship manager Accord Ship Management Ltd, India, holds the remaining one per cent.

The PA said that one of KGMS’s advantages was that the company was a charter executor and managed more than 100 ships of tonnages considerably larger than those of the Navibulgare fleet. KGMS has until November 8 2007 to file its initial offer.

Twenty-three international and Bulgarian companies expressed interest in the Navibulgare privatisation at the beginning of the competition.

According to the PA, the current international situation is favourable for the Navibulgare privatisation because there is a considerable demand for big ships. Although the Bulgarian vessels are more than 25 years old, the demand for second-hand high-tonnage ships will continue at least one or two years.

The PA said that the participation of the German investor in the Navibulgare purchase would guarantee a good price, consistent with forthcoming investments and the commitment to retain jobs.