Bulgarian Pirin Tourist has been selected as the preferred buyer of a 51 per cent stake in the state-owned Hemus Air airline, the Privatization Agency announced on Wednesday.

The contract with Pirin Tourist should be signed within 30 days, according to a statement from the PA. Ninety per cent of the agreed price will have to be paid in compensatory notes, and the remaining 10 per cent in cash. No details on the price tag for Hemus Air were revealed.

According to the PA press office, Pirin Tourist has offered a better price and a more comprehensive development plan than the other two bidders - Sofia-based Leasing Company and Albanian Airlines.

The deadline by which Pirin Tourist and Leasing Company had to submit their proposals for better prices and improvements in business plans was Monday. The third candidate, Tirana-based Albanian Airlines, was excluded from the competition because the structure of its capital was found in violation of a number of international agreements relevant to civil aviation operations. The PA said that the Albanian company did not meet the requirements of the International Air Services Transit Agreement.

Another requirement that was not met was a provision in the EU's ordinance on the licensing of air-carriers which says that participation of companies from other countries that are not EU members cannot exceed 49.9 per cent Pirin Tourist will initially acquire a 34 per cent stake with the option to take control of another 17 per cent in two years if it implements successfully the proposed business plan and material assets acquisition schedule.

PA executive director Levon Hampartsoumian described the scheme for Hemus Air's privatization as "deferred acquisition." The PA head noted that in this way it will be possible to protect the national interest, avoiding repetition of the disasterous sale of Balkan Airlines to Israel's Zeevi Group.

Hemus Air has 16 aircraft (all of which are either TU 134, Yak 40 or L 410) and a staff of 200. The air-carrier flies to Varna, Bratislava, Skopje, Tirana, Bucharest, Leipzig, Oslo and Beirut. It has obtained permits to fly to Damask, Zagreb, Tbilisi, and Pristina. It posted a positive financial result for 2000 - a 48 per cent growth compared to 1999, when profits stood at 308,000 leva and revenue at 17.2 million leva.