The State Privatization and Holding Company (SPHC) intends to sell state-owned corporate shares of medium sized and small businesses in the frame of a simplified privatization, which suppose to accelerate the privatization in Hungary. There are approximately 275 companies to be privatized in this program. Shares of companies may be transferred to private investors through this method of privatization if the own capital of the company do not exceed HUF 600 million and the number of full time stuff did not exceed 500 on an annual average in 1994. Insurance companies and financial institutions are excluded form this simplified procedure. These smaller companies shall be sold in two steps: the SPHC shall publish a list of 100 business until September 30, 1995 and the second list of the companies are to be published until December 31, 1995. The SPHC shall publish in its official journal the name of the company and the minimum price to be paid for the transfer of the shares. The purchaser of the share may pay the purchase price only in cash. The offeror shall provide the SPHC with their offers within 90 days after the publication. The SPHC shall evaluate the cash offers within 90 days after expiration of the aforementioned deadline. The SPHC call conclude an agreement with the offeror who gave the highest bid in the offer. The purchase price shall be full paid within 60 days after the purchase agreement is signed by the parties. If a company may not be sold in the frame of the simplified privatization, the management of the company shall find a potential purchaser until December 31, 1996. The SPHC has to approve the transfer of the shares in this case as well.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further Information please contact: Beiten Burkhardt Mittl & Wegener Lawyers, Jozsef Nador ter 9, H-1051 Budapest, Tel: (36)(1)2661810, Fax: (36)(1) 2661811, or enter a text search "Beiten Burkhardt Mittl & Wegener" and "Business Monitor".