FURTHER controversy has followed the Supreme Administra-tive Court decision to halt the Bulgartabac privatisation deal with Deutsche Bank.
The Privatisation Agency (PA) refused to comment on a statement by an unnamed representative of Deutsche Bank on the Court's decision on Bulgartabac.
Nevertheless, the PA said it believed the reported statement represented the bank's stance.
The statement was made on Monday to Deutsche Welle radio by an unnamed representative of Deutsche Bank, and was reported extensively in the Bulgarian-language media.
The representative told Deutsche Welle that he suspected pressure was exerted on the Supreme Administrative Court to cancel the decision of the PA naming the Tobacco Capital Partners and Clar Innis consortium, supported by Deutsche Bank, winner in the bid for Bulgartabac Holding.
The unnamed source expressed the bank's expectations that during his visit to Germany, Bulgarian President Georgi Purvanov would take a stand on the issue, and would suggest ways to protect foreign investors in Bulgaria, so that Deutsche Bank could decide whether it wanted to remain an investor in Bulgaria or not.
"We were shown the door, which is an unacceptable process for a foreign investor," the unidentified Deutsche Bank representative said.
He said the court's decision was based on economic, not on legal arguments.
Deutsche Bank said that all bidders used economic information about Bulgartabac from the first quarter of this year, which was much more recent than the data on which the Court's decision was based.
Deutsche Bank were surprised that the court believed that Bulgartabac's state had improved. The company continued to have a 40 million euro debt accumulated from outstanding taxes and was unable to buy out this year's tobacco crop. The Bulgartabac deal also was very important from a social and ethnic point of view.
"Imagine what the effect of the privatisation would be if the company went into unclean hands," the representative said, and added the deal would have a negative effect on all foreign investors.
Purvanov, in an interview with Deutsche Welle, said no-one could afford to comment on the statements of Bulgaria's independent judicial authorities.
Before departing for the four-day visit to Germany, Purvanov said that he was optimistic about Deutsche Bank and believed that it would keep its interests in Bulgaria.
Meanwhile, the PA said that its decision on the Bulgartabac case would be announced on November 8.
The PA had to decide whether to appeal against the decision of the Court or to ask for a one-off improvement of the offers on grounds of favourable changes in the financial state of the company under privatisation.
The PA said it was fully aware of the fact that an appeal against the decision of the Supreme Administrative Court would further delay the privatisation procedure.
The PA said it would do everything possible to keep the procedure within normal time limits. According to the PA, an appeal and a further delay of the procedure would not be a good sign for the privatisation process in Bulgaria.
The PA said that if a decision was made to ask for an improvement of the offers, there would be three participants in the procedure - Tobacco Capital Partners, Rossbulgartabac and Tobacco Holding, as the fourth participant in the tender - Metatabac was disqualified following its failure to provide additional explanations regarding its offer.
The offers for the privatisation of 80 per cent of Bulgartabac Holding are valid until November 19. The deposits of Tobacco Capital Partners, Rossbulartabac and Tobacco Holding are still at the PA.
Later on Tuesday, Tobacco Capital Partners issued a press release saying that the management of Tobacco Capital Partners still had not decided whether to appeal against the decision of the Supreme Administrative Court.
The press release said the decision of the Supreme Administra-tive Court cancelling the naming of the consortium between Tobacco Capital Partners and Clar Innis as winner in the tender for 80 per cent of the assets of Bulgatabac Holding and obliging the PA to continue the privatisation procedure by asking for a one-off improvement of the offers came as a great surprise both to Tobacco Capital Partners and to the consortium's partners at Deutsche Bank.
A possibility to improve conclusive offers after their opening rendered pointless the whole competitive procedure.
The management of Tobacco Capital Partners believed a decision by the PA to ask for an improvement of the offers would discredit the entire procedure so far. Such a step would be a bad sign of the state of the investment climate in Bulgaria and would hardly contribute to attracting foreign capital to Bulgaria, Tobacco Capital Partners said.
The decision of the Supreme Administrative Court on Bulgartabac was of no help to the state, Deputy Prime Minister and Minister of Economy Nikolai Vassilev said last Thursday. Vassilev said the single motive to annul the choice of Tobacco Capital Partners as an exclusive buyer sounded irrational. He said that back in the summer, he repeatedly had said that the expected results on the International Accounting Standards would be slightly better. Vassilev said the PA had good grounds to challenge the SAC verdict.
The Privatisation Agency (PA) refused to comment on a statement by an unnamed representative of Deutsche Bank on the Court's decision on Bulgartabac.
Nevertheless, the PA said it believed the reported statement represented the bank's stance.
The statement was made on Monday to Deutsche Welle radio by an unnamed representative of Deutsche Bank, and was reported extensively in the Bulgarian-language media.
The representative told Deutsche Welle that he suspected pressure was exerted on the Supreme Administrative Court to cancel the decision of the PA naming the Tobacco Capital Partners and Clar Innis consortium, supported by Deutsche Bank, winner in the bid for Bulgartabac Holding.
The unnamed source expressed the bank's expectations that during his visit to Germany, Bulgarian President Georgi Purvanov would take a stand on the issue, and would suggest ways to protect foreign investors in Bulgaria, so that Deutsche Bank could decide whether it wanted to remain an investor in Bulgaria or not.
"We were shown the door, which is an unacceptable process for a foreign investor," the unidentified Deutsche Bank representative said.
He said the court's decision was based on economic, not on legal arguments.
Deutsche Bank said that all bidders used economic information about Bulgartabac from the first quarter of this year, which was much more recent than the data on which the Court's decision was based.
Deutsche Bank were surprised that the court believed that Bulgartabac's state had improved. The company continued to have a 40 million euro debt accumulated from outstanding taxes and was unable to buy out this year's tobacco crop. The Bulgartabac deal also was very important from a social and ethnic point of view.
"Imagine what the effect of the privatisation would be if the company went into unclean hands," the representative said, and added the deal would have a negative effect on all foreign investors.
Purvanov, in an interview with Deutsche Welle, said no-one could afford to comment on the statements of Bulgaria's independent judicial authorities.
Before departing for the four-day visit to Germany, Purvanov said that he was optimistic about Deutsche Bank and believed that it would keep its interests in Bulgaria.
Meanwhile, the PA said that its decision on the Bulgartabac case would be announced on November 8.
The PA had to decide whether to appeal against the decision of the Court or to ask for a one-off improvement of the offers on grounds of favourable changes in the financial state of the company under privatisation.
The PA said it was fully aware of the fact that an appeal against the decision of the Supreme Administrative Court would further delay the privatisation procedure.
The PA said it would do everything possible to keep the procedure within normal time limits. According to the PA, an appeal and a further delay of the procedure would not be a good sign for the privatisation process in Bulgaria.
The PA said that if a decision was made to ask for an improvement of the offers, there would be three participants in the procedure - Tobacco Capital Partners, Rossbulgartabac and Tobacco Holding, as the fourth participant in the tender - Metatabac was disqualified following its failure to provide additional explanations regarding its offer.
The offers for the privatisation of 80 per cent of Bulgartabac Holding are valid until November 19. The deposits of Tobacco Capital Partners, Rossbulartabac and Tobacco Holding are still at the PA.
Later on Tuesday, Tobacco Capital Partners issued a press release saying that the management of Tobacco Capital Partners still had not decided whether to appeal against the decision of the Supreme Administrative Court.
The press release said the decision of the Supreme Administra-tive Court cancelling the naming of the consortium between Tobacco Capital Partners and Clar Innis as winner in the tender for 80 per cent of the assets of Bulgatabac Holding and obliging the PA to continue the privatisation procedure by asking for a one-off improvement of the offers came as a great surprise both to Tobacco Capital Partners and to the consortium's partners at Deutsche Bank.
A possibility to improve conclusive offers after their opening rendered pointless the whole competitive procedure.
The management of Tobacco Capital Partners believed a decision by the PA to ask for an improvement of the offers would discredit the entire procedure so far. Such a step would be a bad sign of the state of the investment climate in Bulgaria and would hardly contribute to attracting foreign capital to Bulgaria, Tobacco Capital Partners said.
The decision of the Supreme Administrative Court on Bulgartabac was of no help to the state, Deputy Prime Minister and Minister of Economy Nikolai Vassilev said last Thursday. Vassilev said the single motive to annul the choice of Tobacco Capital Partners as an exclusive buyer sounded irrational. He said that back in the summer, he repeatedly had said that the expected results on the International Accounting Standards would be slightly better. Vassilev said the PA had good grounds to challenge the SAC verdict.
