CANBUL INTERNATIONAL INVESTMENTS Ltd.

THE PRIVATIZATION AGENCY

The Privatisation Agency (PA) was established in 1992 with the L aw on Privatisation and Restructuring of the State -owned and Municipal - owned Enterprises. In accordance to this law the agency was responsible for the sale of the large enterprises, while the line ministries were in charge for the divestment of the smaller and medium firms. The privatisation of all sate -owned interests was centralized at the level of the Privatisation Agency with the adoption of the L aw on P privatisation and Post - privatisation Control in early 2002.   

The main task of the PA is to attract Bulgarian and foreign investors that would restructure and engage in the effective management of the privatised enterprises and thus contribute to the completion of the structural reforms and the achievement of a sustained growth of the Bulgarian economy.

After the end of the process of privatisation the State will retain its control and regulatory functions and will assist the new owners in the development of a clearly codified legislative framework that would simplify the performance of the market functions of the economic subjects.

PRINCIPLES OF PRIVATIZATION

The 39-th National Assembly promulgated in March 2002 a completely updated regulatory framework - the Law on Privatisation and Post-privatisation Control ( L PPC), which contains in itself the philosophy of the privatisation process in the Republic of Bulgaria. The promulgation of the L PPC specified the major methods that are employed for the sale of state-owned assets - public auctions and tenders, privatisation through the Bulgarian Stock Exchange - Sofia, and centralized public auctions . The supplementary bylaws specified the basic principle and rules of the privatisation in the Republic of Bulgaria.

The objective of the L PPC was to establish the conditions for a transparent, quick and economically effective process of privatisation where all investors are treated on a fair and equal footing.
The priorities of the privatisation policy are as follows:
" Rapid sale of non-denationalised enterprises;
" Transparency and openness of the privatisation procedures;
" Restructuring and privatisation of the natural monopolies.

The PA is the only state authority that is charged with the sale of state-owned assets and with the implementation of the government policy in the sphere of privatisation. The PA functions include the drafting of an Annual Action Plan, the preparation of the state-owned enterprises for divestment, the specification of the terms for privatisation of the available set of assets, the preparation of the documentation relevant to the privatisation process, the specification of the method of sale, the performance of an active marketing campaign, the development of clear rules for the privatisation of each individual facility, the maintenance of a Public Register of Completed Sales and the provision of information to the broad public about the progress of the privatisation process. To that end, detailed quarterly Reports on the PA Proceedings and Statistical Data are drafted as a tool to report on the status of the state-owned assets that are involved in privatisation.

The post-privatisation control functions were separated from the PA with the enactment of the L PPC and were transferred to the Post-privatisation Control Agency (PCA), which has the statute of an independent agency with the Council of Ministers. The PCA is charged with the control over the compliance of the new owners with the commitments assumed by force of the privatisation contracts for sale of the state-owned enterprises.

The line ministries preserve their role as principals and representatives of the state and as owners of the enterprises.

The privatisation of municipal property is performed by the municipal councils or by organs appointed by the respective councils.

The privatisation philosophy requires the development of a strategy for the enterprises that define the structure of the Bulgarian economy. The requirements and the conditions that are compulsory for the State shall be identified by representatives of the line ministries and of the PA and by the members of special privatisation task-force groups. The procedures preceding the privatisation and the marketing of strategic and of specific projects will be assigned to consultancy companies.

STRUCTURE OF THE PRIVATIZATION AGENCY

The Agency is managed by an Executive Council whose members are appointed by the Prime Minister.