• rationalization of management;
• additional investments;
• preservation of existing jobs and creation of new ones;
• restructuring and assuming of market positions;
• a pay rise is to be observed everywhere and remuneration is typically reorganized on a payment-by-result principle;
• the social dialogue continues and the trade union organizations remain at the larger privatized enterprises.
  

Summary:

• negotiations with potential buyers are the preferred technique;
• nearly all auctions are repeated at least twice, with the price falling at the subsequent rounds;
• the situation is most favorable at the privatized enterprises which have had available fresh capital for restructuring. Those are typically the enterprises which are operating with materials supplied by the clients, are distributors or have been licensed by a foreign company, or are part of a joint venture. Thus, for instance, "Stil" Ltd holds a licence from Hunter Douglas, the "Yurukov" company is working for a German company supplying the materials. Those enterprises which have been bought by the staff of management are facing graver problems;
• the buyers of enterprises at auctions prove to have nothing to do with them, have never worked there and lack information. In other words, we are in the presence of increasing green-field investment - the typical model of private sector expansion in Bulgaria.
  

Problems:

• the enterprises are being sold in a general context of instability and uncertainty as regards the future prospects of the individual enterprises. The price of the objects put up for sale should take into account the difficulties that the privatized enterprise will have to cope with in this unfavorable environment. One critical problem is the instability of production connections. The suppliers which are state-owned companies are unstable because of their uncertain status. Some privatized enterprises adjust to the situation by building up dealer networks and work with several suppliers as a safeguard against the instability of the situation;
• the lack of suitable credit conditions - the high interest rates - is pointed out as a major problem by most privatized enterprises and above all by those relying on their own capital rather than attracting investments from the outside;
• recruiting qualified labor force is a serious problem. Despite the high unemployment the new owners of the privatized enterprises have difficulties in finding suitable workers on the labor market. It is clearly necessary to link privatization policy with the labor market policy. Perhaps the necessary means for training the staff of the enterprises subject to privatization could be secured from the Training and Professional Fund. Information should be provided and negotiations conducted between the authorities under Art. 3 of the Privatization Law and the buyers about the opportunities provided by an active labor market policy - preferential term loans, cost-free hiring of young specialists and qualified workers, the temporary employment program and other schemes.
  

• Labor force demand on the part of privatized enterprises will have to adjust to the labor force supply and a department should be created at the National Employment Agency to deal with these problems.

  
  

  ---