Investment fund Equest has started talks with Bulgarian construction company Glavbolgarstroy for a majority stake in a project to expand Bulgaria's biggest Rila Mountain ski resort of Borovets,  Bulgarian-language daily Dnevnik reported.

The planned Super Borovets ski complex is estimated to be worth 40 million euro.

It would become clear in coming days whether the two companies would sign a contract, Equest managing partner Georgi Krumov said on February 23. He said the fund was aiming for a minimum stake of 51 per cent needed for a successful financial structure for the Super Borovets project. IntelliNews said that this share would cost about 15 million euro.

Glavbolgarstroy president Simeon Peshov said that he would not comment on the project until February 22, the date when the Samokov municipal council was expected to approve a deal in which Vesela Kyuleva, the widow of assassinated Bulgarian banker Emil Kyulev, was to transfer her stake in the Super Borovets project to Glavbolgarstroy.

The vehicle for the Kyulevs' participation in the Borovets expansion project, Kontrakt 99 and Glavbolgarstroy, signed a preliminary agreement for the share sale.

Kontrakt 99 used to control the majority stake in Rila-Samokov 2004, a company specially established for the implementation of the Super Borovets project.

If the deal is completed successfully, the top shareholder will be Glavbolgarstroy with 75 per cent. The remainder of the shares will be held by Samokov municipality, where the ski resort is located, and Energokomplekt.

According to Krumov, Super Borovets was a large project that would overwhelm an investor going it alone.

The Borovets skiing facilities concessionaire said that it had drafted a resort development plan that mapped out a pace of infrastructure expansion matching the bed capacity. According to the Balkantourist plan, the resort has a current bed capacity of 6500 and should not exceed 15 000.

The plan will be submitted for approval to Samokov municipality by May, said Balkantourist manager Nedyalka Sandalska.

Super Borovets envisages the phased construction of hotels and holiday villages with more than 17 000 beds including sites at low altitudes.

The Super Borovets project was the linchpin of Bulgaria's bid for the 2014 winter Olympic Games, which was rejected by the International Olympic Committee (IOC) last year, reported SeeNews on February 23. It was meant to border the Rila Mountain National Park about 60km south of Sofia.

The project was postponed after Kyulev, who held a majority stake in it, was shot dead in October 2005.

"Plans for investments are, according to the project, about 350 million euro. The beginning of the project will be after we specify what stake we will acquire and construction works will maybe start in May," Krumov said. He said that the plan including the built-up area of about 350 000 sq m should be completed in five years.

UK-based Equest Partners, which manages a portfolio of about 700 million euro, has so far invested in companies in EU new member states Bulgaria and Romania, and in Serbia. Other targets of Equest Partners are Albania, Croatia, Macedonia, Montenegro, Slovenia, Ukraine and Turkey.

As previously reported by The Sofia Echo, the main focus of Equest, which is listed on the Irish Stock Exchange, are investments in companies with substantial growth potential.

In the autumn of 2004, the fund bought three Bulgarian car importers, one rent-a-car firm and four Sofia cinema theatres, together with a number of construction sites. It purchased the importer of Mazda in Bulgaria, Star Motors, Auto Italia (importer of Alfa Romeo, FIAT and Lancia) and Bulvaria Holding (one of the main dealers of Opel and Chevrolet), as well as a representative of car rental company Avis. Equest also has stakes in Bulgarian insurer Vitosha, real estate company Immofinance, retail centre developer Pelican Retail Holding, car dealer Avto Union and supermarket chain Familia. It also has a 75 per cent stake in Lynx Property BV, which is the sole owner of Bulgarian consumer and house equipment retailer Technomarket.