Bulgaria's government is selling "Industrial Construction Holding", a state company, to a local private investor for BGN 12.01 M, the Privatization Agency announced.
The selected buyer of Industrial Construction Holding is Vodstroy 98, a Bulgarian-owned company headquartered in the eastern city of Sliven. Vodstroy 98 was the sole bidder for the state owned construction company.
The state-owned Industrial Construction Holding had a profit of BGN 2.5 M in 2008 but registered a loss of BGN 1 M in 2010.
Its major business activity is the construction of industrial, administrative, and residential projects, and the manufacturing of metal structures.
Its capital amounts to BGN 2.6 M, and it owns 138 residential buildings, 8 production facilities, 23 administrative buildings, 8 plots, and 5 incomplete developments. It also has 6 subsidiaries located around the country – in Sofia, Pleven, Vratsa, Belene, Razgrad, and Yambol.
Back in 2004-2007, the state company completed residential projects in several cities in Germany.
In addition to paying the state BGN 12.01 M, which is BGN 10 000 more than the minimum price required by the Agency for Privatization and Post-privatization Control, Vodstroy 98 will assumed the BGN 8 M debt of the state company. The payment to the state is due within 30 days.
The Sliven firm has also pledged to invest BGN 500 000 over the next two years as part of its privatization commitments.
According to Tihomir Trifonov, owner of Vodstroy 98, his firm will finance the purchase with own funds and with loans from banks and investors.
The sale of "Industrial Construction Holding" is the first more tangible privatization deal carried out by the Borisov Cabinet since the GERB party assumed power two years ago.
According to the anti-crisis measures put forth by the Borisov Cabinet, the government is expected to raise BGN 450 M from privatization by the end of the year but it had made less than BGN 1 M from privatization before the announcement of the Industrial Construction Holding sale.
Vodstroy 98, a company that constructs water supply infrastructure, industrial and residential buildings, was created in 1998 in order to buy the state-owned "Water Construction" company in Sliven; it is owned by PM Kontrol, which is 100% owned by Tihomir Trifonov.
After registering a profit of BGN 8.3 M, Vodstroy 98 made only BGN 2 M in net profits in 2010.