[Intl-tobacco] Bulgaria eyes $100-$500 mln from Bulgartabak sale (fwd)

[Robert Weissman]

Bulgaria eyes $100-$500 mln from Bulgartabak sale
by Anna Mudeva
Source: Reuters, Wednesday, 8/1/01

SOFIA, Aug 1 (Reuters) - Economy Minister Nikolai Vassilev said on
Wednesday Bulgaria hoped to earn between $100 million and $500 million
this year by selling tobacco monopoly Bulgartabak Holding , which controls
22 factories.

``We would hardly get $500 million (for Bulgartabak), it's too much. $100
million is too low. So we hope to get something between those two,''
Vassilev told reporters.

He said one option was to offer for sale the holding company, which would
allow Bulgaria to appeal to a multinational company, although it would
mean obtaining a lower price.

The other option was to sell Bulgartabak's most attractive factories
separately, which could bring more money.

He said the most valuable asset is cigarette factory Blagoevgrad BT, in
which Bulgartabak holds an 85-percent stake.

``The most important now is not the price but are we going to have a deal,
or not,'' Vassilev said.

The government that took office last week has said selling control of
Bulgartabak, telecom monopoly BTC and Varna shipyard were its top
priorities.

Vassilev said the government's privatisation strategy for Bulgartabak will
be prepared by the end of August. The state controls 92.84 percent of the
holding, the remainder is held by private companies and individuals.

Vassilev said the government also planned to list an unspecified stake in
Bulgartabak on Bulgaria's stock exchange in a bid to boost the fledgling
bourse.

Last year, a tender for 51 percent of Bulgartabak failed to attract bids.

``This time we'll assure investors that they will work with a new team
which will offer them complete transparency, a clear and fast
privatisation process.  And they will appear, I'm sure,'' Vassilev said.

He said the government was in unofficial talks with potential bidders,
inculding British American Tobacco (quote from Yahoo! UK & Ireland:
BATS.L), Philip Morris (NYSE:MO - news) and a financial consortium.

Bulgartabak Holding made a net profit of 11.68 million levs ($5.28
million)  last year, up from 5.3 million levs for 1999.

The holding said it would pay 3.154 million levs in dividends, or 27
percent of its 2000 net. The dividend payment will equal 43 percent of the
face value of the holding's shares, up from 19 percent for 1999.

The group's consolidated 2000 net profit was 29.117 million levs, up from
25.05 million in 1999, due to reduced operation costs, upgraded output and
an agressive marketing strategy.

Bulgartabak's 22 factories include three in Russia and two in Ukraine and
Romania. It sold 22,880 tonnes of cigarettes last year, up 6.13 percent
from 1999. Its exports rose by 2,373 tonnes or 35.8 percent in 2000.

($1 equals 2.21 Bulgarian Levs)