V. FISHING COMPANIES 



From its inception, the Bulgarian state 

 heavily subsidized high-seas fishing 

 operations, making it possible for the state- 

 owned marine fisheries company, RIBNO 

 STOPANSTVO, to expand and continue 

 operating. From 1987-1990, fishery subsidies 

 amounted to 112 million leva, or $18.7 

 million.''' After the communist regime was 

 defeated in 1990 elections and free market 

 principles introduced into the Bulgarian 

 economy, RIBNO STOPANSTVO was 

 declared bankrupt, and was forced to 

 restructure itself in an attempt to become 

 profitable.'^ 



At the end of 1990, RIBNO 

 STOPANSTVO was divided into six state- 

 owned fishing companies. The largest, the 

 OKEANSKI RIBOLOV (Ocean Fisheries) 

 Company, engages in high-seas fisheries. 

 These companies face serious shortages of 

 capital needed to upgrade and modernize their 

 fleets. During the last few years, the 

 Bulgarian fishing industry has been going 

 through a difficult period of transition and 

 adjustment caused partly by the loss of access 

 to high-seas fishing grounds, and partly by the 

 introduction of the market economy."' 



In 1991, OKEANSKI RIBOLOV 

 experienced a major financial crisis. The 

 increasing costs of operating its high-seas fleet 

 (higher licensing fees, costlier diesel fuel, 

 higher maintenance and repair costs abroad, 

 etc.) and mismanagement (the company 

 suffered a loss of 34 million leva in its sales 

 department during January-July 1991) brought 

 the company to the brink of bankruptcy. As 

 in the past, the company's management 

 requested that the Bulgarian Government 

 extend a subsidy of 131 million leva to 



balance its books. The Government appointed 

 a commission chaired by the Deputy Prime 

 Minister, LUZHEV, to determine how the 

 company, which employed about 2,000 

 persons, could be saved. 



According to the Bulgarian media' ^ the 

 Commission advised that bilateral agreements 

 be concluded with the (then) Soviet Union, 

 Canada, the United States, Namibia, Angola, 

 and the Falkland Islands to secure access to 

 fishery resources. Such a solution was 

 illusory as Canada and the United States no 

 longer permitted foreign fishing and Namibia 

 declared a fishing moratorium in its 200-mile 

 zone. It was also noted that while domestic 

 subsidies in leva made it possible for the 

 company to earn hard currency, the latter 

 failed to "find its way into the Bulgarian 

 treasury". 



According to the U.S. Embassy in Sofia, 

 the company concluded its 1992 business year 

 with losses totaling 79.2 million leva (US$ 2.8 

 million). The losses continued in 1993, when, 

 during the first quarter, the company lost 24.4 

 million leva. Faced with a shortage of 

 available hard currency, an aging fleet, 

 mounting debts, and decreasing domestic 

 demand for fishery products caused by the 

 difficult economic times in Bulgaria, 

 OKEANSKI RIBOLOV recently declared 

 bankruptcy. There was some hope that 

 profitable joint ventures or infusion of foreign 

 capital might prevent the liquidation of the 

 company, but it now appears that any profits 

 from joint venmres will not be sufficient to 

 keep the company operating. The company's 

 management hopes that it will be restructured 

 and privatized as a limited liability company 

 and shares will reportedly be offered for sale 

 within the year. 



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