The strategy for the privatisation of Navigation Maritime Bulgare (Navibulgare) sparked a conflict among ministers during a Cabinet discussion on July 27.

The review of the strategy did not result in any decision.

Local media reported on July 28 that the ministers of Defence, Internal Affairs and State Administration opposed the draft proposed by a working group headed by Transport Minister Petar Moutafchiev. Deputy Prime Minister and Foreign Minister Ivailo Kalfin and Economy and Energy Minister Roumen Ovcharov were reportedly also against the proposed sell-off strategy.

State Administration Minister Nikolai Vassilev reportedly said at the Government meeting that the proposed procedure would discourage fleet operators and would facilitate the participation of charter companies in partnership with Navibulgare executives.

The sell-off strategy would be discussed with the trade unions and the maritime industry next week, Moutafchiev said.

The planned privatisation of Navibulgare should be conducted cautiously, according to Prime Minister Sergei Stanishev, who spoke in Parliament on July 28.

Moutafchiev said a hasty privatisation would be detrimental to the national maritime transport industry. He stressed that Navibulgare should be sold to the best possible investor in accordance with a clear strategy.

Stanishev said a strategy was being finalised. He described Navibulgare as “an enterprise of strategic importance for the Bulgarian economy”.

The company had its traditions and potential, but it was currently in very grave condition, Stanishev said. The average age of its ships is 24 years, whereas the international average is 14 years.

He noted that only the operation of the company would be privatised, while its tangible assets were not subject to privatisation.

Stanishev advised against privatisation “at all costs”. The privatisation of any enterprise should involve guarantees that the company’s line of business will be preserved, its competitive power will not be affected adversely, and its staff will not be downsized unreasonably, he said.

On July 31, it was reported that the Transport Ministry had completed work on the strategy for the privatisation of Navibulgare and will ask Parliament to adopt the document no later than end-August.

The strategy envisages a stock-exchange listing for the fleet no sooner than five years after the 70 per cent initial divestiture, a condition that will disappoint the Bulgarian investor community, which has been anticipating the sale of a minority stake in the company on the stock market for three years.

Though the company was registered as a public corporation three years ago, no further move had been made towards an actual listing on the stock exchange.

In a further blow to the local capital market, the future buyer of the fleet is barred from using compensatory instruments – issued to owners of properties taken during the communist era that cannot be restored to them – as a payment option.

Navibulgare will be sold on a competitive basis to a consortium of strategic investors.

The future owner of the fleet will be barred from changing its core business for a period of 10 years and will be obliged to bring the average age of the fleet to below 20 years.