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Privatisation of the government stake in Bulgarian Stock Exchange

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Press release by BSE-Sofia
Privatisation of the government stake in Bulgarian Stock Exchange – Sofia and Central Depository AD
Today, March 15, 2012, Bulgarian Stock Exchange – Sofia received the following information:
The Ministry of Finance, in the latter’s capacity of a principal of the government stake in Bulgarian Stock Exchange
– Sofia and Central Depository AD, has entrusted the Privatization and Post-Privatization Control Agency with the
preparation and the organisation pertaining to the privatisation of both companies.

Press release by BSE-Sofia here
 

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register said:
You are welcome to buy it.
Press release by BSE-Sofia
Privatisation of the government stake in Bulgarian Stock Exchange – Sofia and Central Depository AD
Today, March 15, 2012, Bulgarian Stock Exchange – Sofia received the following information:
The Ministry of Finance, in the latter’s capacity of a principal of the government stake in Bulgarian Stock Exchange
– Sofia and Central Depository AD, has entrusted the Privatization and Post-Privatization Control Agency with the
preparation and the organisation pertaining to the privatisation of both companies.

Press release by BSE-Sofia here
Click to expand...


In compliance with the “Concept of the Integration of Bulgarian Stock Exchange – Sofia and Central Depository AD
into the European and World Financial Markets” as adopted by the Council of Ministers of the Republic of Bulgaria under
Resolution dated April 06, 2011, the privatisation procedure aims at enhancing the efficiency of the Bulgarian Capital
Market and securing its future amongst the European markets through its consolidation with a leading world or European
exchange operator or exchange group.
The privatisation procedure provides for the bundle sale to a single strategic investor of the government stakes
amounting to 50.0542% in the capital of Bulgarian Stock Exchange – Sofia and to 43.7% in the capital of Central
Depository AD. In view of the fact that the Exchange holds additional 6.61% in the depositary institution’s capital, upon
finalising the procedure the buyer is to control more than 50% in the capital of each company.

Press release by BSE-Sofia here
 
Bulgaria will seek to hire only major investment banks or consultancies to help arrange the privatization of the country's only stock exchange and depository, according to insiders.

There are two major eligibility criteria advisers should meet, Capital daily reported, citing parameters of the privatization procedure it has obtained.

The eligible advisers should have featured among Mergermarket's top fifteen legal advisers to M&A deals in Central and Eastern Europe, excluding Russia and the former Soviet republics, from 2005 to 2010. They also must have been hired for at least 10 deals worth EUR 5 B during the same period of time.

The requirements mean that consultancies like Bank of America, Merill Lynch и JP Morgan, as well as seven financial institutions, which have subsidiaries in Bulgaria - Unicredit Group, Deloitte, Deutsche Bank, BNP Paribas, Citigroup, Raiffeisen invesment and Societe General – are eligible advisers.

Bulgaria targets major global and European bourse operators for the sale of its only stock exchange and depository, which it hopes to wrap up in the first half of this year, according to insiders.

Bulgaria's government has packed together its stake at the stock exchange and the depository in a bid to sweeten the deal for the bourse privatization. The bundling ensures that the new owner will have the freedom to define its own policy on both trading and post-trading level.

The eligible candidates can be only stock exchanges, exchange operators or holding companies that own more than 50% of regulated markets. They can not be state owned, but must have a license for trading, according to unofficial information.

Potential buyers should have at least EUR 2 B monthly total turnover of market shares and/or average monthly derivative contracts of at least 2 million units for the last two years as of the end of 2011.

The requirements mean that Deutsche Boerse and the London Stock Exchange are eligible bidders, but not the Warsaw Stock Exchange, experts say.

An official list of requirements that bidders should meet is expected to be submitted to the Agency for Privatization and Post Privatization Control (APSK) within days.

Bulgaria's only stock exchange became a public company in the middle of December 2010 after the Financial Supervision Commission approved its prospectus and the bourse was listed on its own platform. The capital of the bourse is a total of BGN 6 582 860 at BGN 1 apiece.

Bulgaria's Finance Ministry raised at the beginning of October its share to 50% plus one share from 44% in the country's stock exchange. The government bought 715,000 shares at BN 1 apiece.

The shareholders said the move aims to ease the future privatisation of the exchange and the search for a strategic investor.

Shortly after the Bulgarian Stock Exchange launched the sale of its shares in January 2011, Finance Minister Simeon Djankov announced that there is a "huge" interest among investors, but declined to name them.

Meanwhile, in the middle of last year, the central bank transferred its 20% stake in the central depository to the finance ministry. The two thousand shares were purchased at their nominal value of BGN 100 apiece.

Following the acquisition of the central bank stake, the Finance Ministry holds a 44.9% stake in the central depository, whose capital totals BGN 1 M. The state privatization agency owns 1.8%.

Since 2008, the Bulgarian stock exchange has traded on the Deutsche Boerse's Xetra platform under a contract that expires in 2012. Bulgaria has discussed ways to sell its bourse stake over the past decade with Sweden's OMX AG and exchanges in Austria, Greece and Poland to boost interest in local stocks and make trading more transparent.

Sofia Stock Exchange has been the top performer in South East Europe during the first half of last year, according to a Financial Times ranking.

The region's top performer is Bulgaria with a rise of 29% in USD terms and 22% in local currency. According to FT data, that's the world's best in USD terms and second only to Zambia in local currency.

Tags: depository, sofia, Bulgaria, stock exchange, Finance Ministry, Bulgarian Stock Exchange, Victor Papazov, Financial Supervision Commission, finance minister, Simeon Djankov, Ivan Takev, Deutsche Boerse, London, Warsaw, Xetra, Sweden's OMX, Austria, greece, Poland, Mergermarket
» Subscribe to receive alerts by email for any of these keywords.
 
Question - if the Bulgarian Exchange is such a good opportunity, why have Warsaw or Vienna not bought it? Between the two of them, they've been trying to buy everything else...

The only recent stock exchange deal in the region that I'm aware of that Warsaw or Vienna didn't participate in was the Micex/RTS deal in Russia, but that was effectively a merger and only had a small amount of new funding from predominately international financial investors designed to build trust in the exchange.
 
Warsaw is not eligible buyer,against requirement -not to be state owned.

Fairly cheap stock market and fairly cheap price for only stock exchange and depository packed together, this is opportunity.
Fairly cheap price and open door into the EU markets in country with low taxes, 10 percent flat rate I will repeаt 10 percent flat rate, this is opportunity.
 
register said:
Warsaw is not eligible buyer,against requirement -not to be state owned.

Fairly cheap stock market and fairly cheap price for only stock exchange and depository packed together, this is opportunity.
Fairly cheap price and open door into the EU markets in country with low taxes, 10 percent flat rate I will repeаt 10 percent flat rate, this is opportunity.
Click to expand...

Tax rate is completely irrelevant. And if Warsaw can't buy it, Vienna will. I hope they're not burning too much money on advisors - it's not like there are many alternatives.

What were you hoping to achieve posting about it on here?
 
A discussion about privatization of the government stake in Bulgarian Stock Exchange which is in top 3 Frontier Markets according to BLOOMBERG MARKETS: The 14 Most Exciting Frontier Markets In The World.:)
 
A few years ago, I was going to buy a big chunk of land in a Bulgarian ski field (the skiing is excellent) it also came with a 10 room hostel for some ridiculously silly price like $40,000. Then I looked at the legal system of Bulgaria and the hoops you have to jump through to prove ownership and even at those crazy low prices I baulked. The problem with these ex-Communist states is that in many instances the legal system has not adjusted to capitalism. So regulation is poor, corruption is rife and bureaucracy is extreme and yes you are expected to grease the wheels of government. Hardly a winning combination for equity investment.
 
McLovin said:
The problem with these ex-Communist states is that in many instances the legal system has not adjusted to capitalism. So regulation is poor, corruption is rife and bureaucracy is extreme and yes you are expected to grease the wheels of government. Hardly a winning combination for equity investment.
Click to expand...

It's not easy, but it's much easier now than even just 10 years ago (so I'm told). Corruption and all these other things you mention are still problems of course, but they're words that I'm quite careful with because you risk throwing the baby out with the bath water.

I've spent the last 4 years investing in the former soviet union and I've seen even the most sophisticated western investors freeze up for the reasons you mention often without basis. It's a shame, because there are a lot of interesting opportunities there...
 
On December 4, 2012 in pursuance with the first stage of the procedure for privatization of the state-owned stakes in the Bulgarian Stock Exchange – Sofia and in the Central Depository, the Privatization and Post-privatization Control Agency (hereinafter PPCA), as a result of PPCA’s consultant selection process, entrusted Patria Corporate Finance a.s., Prague, Czech Republic, with performing marketing activities, preparing analysis on the legal standing, information memorandum and a privatization assessment of each of the two companies . Following the implementation and the acceptance of the activities performed by the consultant, PPCA will proceed by holding a publicly announced competition in order to sell both state-owned stakes. Only leading exchange operators or exchange groups will be admitted to participate in the sale competition in question.
http://www.x3news.com/?x3id=67236#
 
Jim Rogers :"at the moment I am not really doing anything other than Bulgaria,"

Monday, January 21, 2013
Jim Rogers : "I am thinking about investing in Bulgaria. I keep my eyes on those areas to see what may happen, but at the moment I am not really doing anything other than Bulgaria,"

http://jimrogersinvestments.com/
 
register said:
Bloomberg Markets The 25 Best Frontier Markets For Investors
Jan. 30, 2013
PLACE 4 Bulgaria

Total Score: 71.2

GDP Growth,
2013-2017: 27.1%

Inflation Rate: 2.8%

Gov't Debt As
% of GDP: 15.0%

Ease of Doing
Business, Rank: 66

Source: Bloomberg Markets

Read more: http://www.businessinsider.com/bloomberg-presents-the-25-best-frontier-markets-for-investors-2013-1
Click to expand...

Bulgaria is interesting but a small and declining population, has a banking system significantly exposed to Greek banks, serious economic issues with major trading partners, massive issues in the property markets and non-performing loans probably 25% or higher. Not sure how it ranks anywhere near the top 25 frontier markets for investors....
 
doctorj said:
Bulgaria is interesting but a small and declining population, has a banking system significantly exposed to Greek banks, serious economic issues with major trading partners, massive issues in the property markets and non-performing loans probably 25% or higher. Not sure how it ranks anywhere near the top 25 frontier markets for investors....
Click to expand...

net nonperforming loans past due more than 90 days
September 2011 -14.45%
December 2011 -14.93%
March 2012 -11.28%
June 2012 -10.71%
September 2012 -11.60%
December 2012 -10.62%
I dont see "massive issues in the property markets"

Bulgarian population is a part of EU population,so I dont realy undestend what "small and declining population" means.
 
I have lived in Bulgaria for the past three years and can confirm the population is declining due to emigration to other parts of the EU. It currently has a population of 7.5 million with 1 million declining ever ten years for the past twenty years (since communism fell).
I do invest in Bulgaria, however there are some unique (for me as an australian) issues.
They have land ownership only for locals or companies (easy to get a company). They then have separate tittles for the buildings on that land. So you may own the land but not the building (if you dont know what you are doing).
PS: Sking in Borovets this year is great!
 
register said:
net nonperforming loans past due more than 90 days
September 2011 -14.45%
December 2011 -14.93%
March 2012 -11.28%
June 2012 -10.71%
September 2012 -11.60%
December 2012 -10.62%
Click to expand...

Official statistics are nice, but I know the banks and their portfolios are a whole whole lot worse than that. Banks can't recognise NPLs that would wipe out their capital base and regulators wouldn't want em to as its a systemic issue. So all they do is extend and pretend...

For the record, it's not a lot different in Serbia or Romania either...
 
doctorj said:
Official statistics are nice, but I know the banks and their portfolios are a whole whole lot worse than that. Banks can't recognise NPLs that would wipe out their capital base and regulators wouldn't want em to as its a systemic issue. So all they do is extend and pretend...

For the record, it's not a lot different in Serbia or Romania either...
Click to expand...
Some of the people say "this cup is half empty",other say "this cup is half full"
In our case almost 70% of people see Bulgaria as a grate opportunity and put it on PLACE 4 from The 25 Best Frontier Markets For Investors YEAR 2012
http://www.businessinsider.com/bloomberg-presents-the-25-best-frontier-markets-for-investors-2013-1


PS:Тhird place for Bulgaria"The 14 Most Exciting Frontier Markets In The World" YEAR 2011
http://www.businessinsider.com/bloo...re-these-frontier-markets-in-2012-2012-2?op=1

well.. it is obvious that this cup is half full:)
 

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