The increase of Bulgaria's government share in the country's only stock exchange is a step for its reprivatization, probably selling the stake to an international exchange group, insiders say.

Bulgaria's Finance Ministry raised on Monday its share to 50,05% from 44% in the country's stock exchange, which has been turned into a public company.

A proposal to this effect was adopted at an Extraordinary General Meeting of the Bulgarian Stock Exchange on September 13.

It is expected that the listing of the Bulgarian exchange on its own platform will be a fact by the end of 2010.

Representatives of the Finance Ministry and the Stock Exchange have commented that the move will give the ministry the opportunity to seek a strategic investor, make the Exchange transparent, increase interest towards the capital market and reinstate the trust in the latter.

Meanwhile Victor Papazov, founder, former CEO and chairman of the Bulgarian Stock Exchange has harshly criticized the decision, saying the Bulgarian government is threatening the country's economic future with a bid to effectively nationalize its stock exchange at a knock-down price.

"Certainly the Bulgarian Stock Exchange does not remotely require central government control," Papazov wrote in an article for the Wall Street Journal.

Papazov urged the Finance Ministry to rethink their stance on what he has called "a short-term and ill-considered" act, which will present the government as "a new model of sovereign-wealth robber baron".

Bulgaria's center-right government has been angling for strategic investors for key majors, such as the tobacco monopoly and a few energy companies, in which the state owns higher than a 50% stake.

The decision was taken earlier this year after the cabinet was urged to sell on the stock exchange shares in companies, which are part of the Bulgarian Energy Holding, in a bid to put the local capital market back on track.

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