Tourist Invest AG was selected as the exclusive buyer of a 60 per cent stake in the winter resort Pamporovo AD after six rounds of privatisation negotiations.
The approval came last Thursday after the bidder improved its offer to $11 million. The contract is to be signed by the end of December.
During the fourth and fifth round of negotiations, the two candidate buyers, Swiss-based Tourist Invest AG and the Bulgarian Petrol Holding Group, did not improve their bids, which were in the range of $8 million to $9 million. Consequently, the Minister of Economy Petar Zhotev announced that it was possible a new privatisation procedure would be launched.
During the fourth round of negotiations both bidders asked the Ministry of Economy if they could use in the future payment the mechanisms of the debt arrangement agreement between Bulga! ria and Italy, thus implicitly dis counting the real cash payments they would make. This would have breached the terms of the so-called target privatisation, which stipulates that a 100 per cent cash payment for the companies included in the target privatisation list, among which is Pamporovo AD, is needed. Consequently, after the sixth round was completed, Zhotev stated that the entire price would be paid in cash, 50 per cent at the day of signing of the privatisation contract, and the rest within 15 days.
The Ministry of Economy announced that Tourist Invest’s majority shareholder with a 98-per cent stake is Swiss Mantrust AG.
Currently, Pamporovo owns the aging three-star Perelik and Arfa hotels and three restaurants, but the company’s revenues come mainly from its ski services. Most of the facilities were divested as core units of the resort last year. All core units were sold to Bulgarian bidders. Hotel complex Prespa-Rozhen was acquired by Orfei-99 EOOD for $! 700,000. Hotel Mourgavets was dive sted to Royal Holiday AD for $1 million. The hotel complex Malina was sold to Vinisa Travel for $957,000.
A number of other hotels and restaurants were acquired for even lower prices. Thus, the winter resort’s major competitive advantage remained its monopoly on all ski-tracks and facilities in the area of Pamporovo.
However, many restitution claims are still not satisfied. The former landowners want to be compensated with a sizable stake of shares in Pamporovo, instead of compensatory notes - a compensation instrument, which historically trades at a deep discount. Following the contract signing, a representative of the landowners stated that they would appeal against the privatisation decision.