The majority of the privatization transactions concluded up to
now involve the sale of separate parts or entire enterprises
(according to Chapter VI of the Privatization Law). The number of
enterprises privatized through sale of interests and shares is
smaller. To a great extent this is determined by the legal status
of the privatized enterprises. In most cases the privatized fixed
assets, separate parts or entire enterprises under Chapter VI of
the Privatization Law become part of the assets of the buyer
company. As a result, the corporate body of the privatized
state-owned enterprise is either subject to termination or has to
indicate the changes in capital with the sale of the respective
separate part or fixed asset.
Typically, when incorporated in the newly formed or already
operating private company the state-owned enterprises privatized in
this manner constitute the principal part of its assets. This is
particularly true in cases when the buyers are smaller or newly
formed companies, which seems to speak of the critical role that
privatization is to play for the future development of this type of
economic agents. In this sense it is closely related to the process
of formation of new firms or to the development and expansion of
the activity of already existing private enterprises.
When the buyers under the provisions of Chapter VI of the
Privatization Law (privatization of entire enterprises or separate
parts thereof) are larger private companies, there are cases when
the acquired enterprise becomes a subsidiary company or branch.
Even if more limited in the practice to date, privatization
through sale of interests and shares of commercialized state-owned
enterprises will predominate in the future owing to the nature of
the changes in the existing regulations and legislation. The
post-privatization outline of the legal state of the enterprises in
this type of transaction is the following:
- preservation of the corporate body of the enterprise with a
registration of the changes in ownership;
- acquisition on preferential terms of part of the interest or
share by the staff (there are nearly no instances of failure to use
this preference);
- when the buyer of the majority share is not the staff or part of
the staff, in a number of cases those who have acquired a share on
preferential terms wish to sell it at the higher price to the major
shareholder. Even if economically and socially justified, this
possibility has been abolished with the changes in the
Privatization Law.
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