Tuesday, March 10, 2009

Oman State General Reserve Fund in Bulgarian rubbish stand-off

From Mad Dogs and Englishmen in the noon sun to classic trash journalism!

A little, itty bitty article in the Bulgarian news - about the rubbish piling up in their streets - revealed part of the investment strategy of the somewhat secretive Omani State General Reserve Fund today.

At News.bg you will find the latest articles, news, interviews and comments from today's Bulgarian press, and this tale caught my avatar's attention

(well, in addition to the story about the Bulgarian Playboy model who's also in the press and little else):

Photo: Julia Lazarova

As quoted from the popular Trug newspaper, HM gets a mention:

The Trud daily

"Sofia terminated the concession for waste collection", "Trud" writes in its main feature "the Topic". Sofia municipal council decided yesterday to terminate unilaterally and prematurely the contract with the firm "Novera" for the cleaning of 19 regions of the city beginning April 1 2009. The motive is criminal non-performance on the part of the concessioner. The offer by mayor Boyko Borissov was unanimously supported by the advisors of all political groups at an emergency session of the municipal council. In its front material "Trud" points out that the sultan of Oman Qaboos ibn Sa'id controls the Sofia waste, because in January the owner of "Novera" (the British fund "Inquest Investment Balkans") changed its owner. Now the major investor in it is the sultan of Oman.

Its true folks!

Well, sort of true. Its a bit of a shaggy dog tale this one...

The publicly listed British Company Equest Investments Balkans Limited, was floated a while ago to invest in the Balkans, and especially Bulgaria and other east European areas. It was tipped by some investment Einstein - at the peak of market exuberance last year - to be heading for a doubling of its share price to more than 25 pounds , according broker KBC Peel Hunt who valued the shares at a whopping 2628p – significantly above the then current price of 1032.5p (floated at 300p).

It seems the Omani State General Reserve Fund [aka the SGRF] were then already partners with Equest in a massive ski development scheme called Borovets. Check it out.

Borovets - a 600 million Euro Ski village development in the Bulgarian mountains.

The SGRF also recently bought a big piece of a Bulgarian Commercial Bank, coincidentally.

Meanwhile, in a venture I believe unconnected at the time to their relationship with Oman's SGRF, Equest Investments Balkans Limited went off and bought up the 3 main rubbish collection agencies in Sophia (the capital of Bulgaria), and under the company name Novera won a concession to get the contract for collecting the trash.

That magic EIB "growth stock" tanked in October as their leveraged real estate and Balkan-growth dependent investment strategy went down the gurgler. It went down more than 80%, from 1071p to under just 210p. What a stock tip!

BUT! In late December last year, probably in exchange for around 20 million euro, Oman's SGRF stepped in after the plunge in stock price and became the majority shareholder, with over 30% [32.27% actually] of the company. They placed Mr Warith Mubarik Al-Kharusi (head of the SGRF) and Mr Faisal Amur Mohamed Al-Riyami (young UK trained beancounter) on the board in January.

Just at the time the Omani fund moved in, funnily enough, a couple of likely lads from the Kairos Eurasian Fund (co-founder of the fund Mr Guido Maria Brera and a Mr Kalim Aziz) also jumped in and bought 20.50% (and possibly at a good price too it would seem, from the timing in the company filings and the shareprice graph). The Kairos Eurasian Fund, together with SGRF, thus control the company, and with the Exec Director they reinstated (a Mr. Krumov), have a majority of positions on the board (5/9).

So, it was by this round-about route that 'His Majesty' was tagged by the Bulgarian 4th Estate as now personally owning Sophia's rubbish, as the Omani State General Reserve Fund (with their partners) now control EIB, who happen to own Novera the trash company, who a couple of days ago stopped collecting the rubbish in Sophia (claiming non-payment by the city). As the trash piled up and started to stink, the Major said they'd been paid, that he wouldn't be blackmailed, and called a special meeting of the council to cancel the concession, effective in April. As Novera own all the trucks and employ all the workers, it'll be interesting to see how that goes. I can sense a phone call to Bulgaria's Ambassador proving useful.

And don't forget it's quite common for the press to link His Majesty to investments actually made by the Omani Sovereign Investment fund as if HM owned them personally, something which I don't believe is true at all (although HM obviously ultimately controls the SGRF 100%). But I guess it sells more papers and is far more interesting to report that way.

(This post is getting a bit long. In Part 2... what this actually means for the SGRF, and why this story is really interesting, soon)


  1. Mmmmmmmmm. You're getting good at this. Do you think they could clean the beach up at Shatti?

    This stuff is easy to understand. Wish I had operated in your Country of residence. As long as I didn’t walk my dog or tolerate cross-dressers or gays nobody where you are would have cared what I did. Guess this particular Blog won’t be getting much response...Especially as IPs have become easier to back trace.

  3. Well, with similar developments in Oman being big failures (Blue City, Yiti, Shinas, etc.), it might indeed be better to try it elsewhere before going for another attempt here...

  4. Is the picture of overflowing rubbish bins from Sophia or here?? Don't know what those Bulgarians are complainig about.


If you wish to post anonymously, please pick a nickname by selecting the Name/URL option, or at least sign off your comment with one! I will delete comments I find objectionable or needlessly inflammatory. Sorry for the word verification.... OMG the spam has gotten BAD these past 12 months... trying to avoid making one log in...