26/07/2006

The Competition Protection Commission (CPC) gave its approval on July 6 for US movie production company Nu Image to acquire control of 95% of the Boyana Film Studios see article).

Nu Image won a tender to buy the stake in Boyana Film from the Bulgarian Government in June 2005, offering 12.2 million leva (€6.2m). Nu Image also pledged to invest 30.5 million leva in Boyana’s upgrade.

The CPC said in a statement that it could withdraw its approval of the deal if the buyer did not carry out its pledged investments in the volume and time frame laid out in the privatisation contract.

Neither the studio nor the buyer could apply for state financial support in production, promotion, screening and distribution, for a period of five years, the CPC said. Nu Image cannot sell the existing studios at Boyana Film or newly built facilities over the same period. The US firm should report on the implementation of the three conditions and the investment plan at the end of every calendar year, CPC said.

Nu Image has pledged to keep the core activity of the filmmaking studios for at least 20 years. The buyer is also banned from transactions involving the land of the film studios for 20 years.

Nu Image Bulgaria and the Privatisation Agency (PA) signed the contract for the sale of Boyana Film studios on January 24, 2006. This was the second signing of the contract. The first one was initialled on June 24, 2005 but a series of additional clauses were imposed by the PA before the deal was approved by the agency’s supervisory board.

Several Bulgarian filmmakers have opposed the deal from the very beginning of the privatisation procedure (see article). In the past year, they took a series of actions to attempt to block the signing with Nu Image, including petitions to the prosecutors’ office, Parliament, the Ministry of Culture and the PA.

Filmmakers have been claiming that the selection of Nu Image was not in the interests of Bulgarian cinema. They have consistently claimed that the PA has been favouring Nu Image, which, according to the professionals, had used Boyana Film to make films for years, but had no high-quality productions shown in cinemas.

Representatives of the filmmakers’ guild also said it was former Deputy Prime Minister and Minister of Economy Lydia Shouleva who was behind the Boyana Film saga. There have been a number of media reports for over the past year that, while in office, Shouleva exerted pressure on behalf of Nu Image through then PA Executive Director Atanas Bangachev, whom she had appointed.

Shouleva has never responded to the allegations. On several occasions she told reporters that she was aware of the deal but had no information on it after losing her ministerial position in February 2005.