[Intl-tobacco] Bulgaria says four firms want Bulgartabak Holding (Oct article))]

[Robert Weissman]

October 16, 2001
BULGARIA: Bulgaria says four firms want Bulgartabak Holding.
By Anna Mudeva
Reuters English News Service

SOFIA, Oct 16 (Reuters) - Four international investors are ready to buy
Bulgaria's tobacco monopoly, but the government said on Tuesday it wants to
discuss ways to attract bids from industry majors for Bulgartabak
Holding .
"At least four potential investors have accepted our offer to sell the whole
holding," Deputy Economy Minister Kaloyan Ninov told Reuters.
"There were major companies among those four, but of course Philip Morris
and British American Tobacco are a little bit more conservative," he said,
adding the two giants were more interested in buying two most lucrative
assets of the holding, plants in Sofia and in the city of Blagoevgrad.
The government was ready for further talks, Ninov said.
"We will give them enough room for manoeuvre by allowing them to restructure
the holding. In other words we will give them the opportunity to close down
some loss-making factories."
The government said on Thursday it planned to sell between 51 and 80 percent
of the holding instead of selling its 27 factories separately.
No price tag has been announced. In August, Economy Minister Nikolai
Vassilev said Bulgaria hoped to earn between $100 million and $500 million
from Bulgartabak's sale this year.
Ninov said the price will depend on the amount of obligations the future
investor would be ready to take up.
"The more obligations, the lower the price," Ninov said. Preserving jobs is
a politically sensitive issue, especially in the tobacco growing regions
populated by Bulgaria's impoverished ethnic Turk minority.
On Friday, the government met with 12 companies which had expressed
interest.
Those included Imperial Tobacco Group , Altadis , Papastratos , Bank of
America , HSBC , Deutsche Bank and Societe Generale , International Tobacco
Fund, Frana, and Missirian Bulgari & Standard Commercial.
Bulgartabak has 22 domestic subsidiaries including 12 tobacco processing
factories, nine cigarette factories and one producer of tobacco driers,
filters and packing. It also has three factories in Russia and two in
Ukraine and Romania.
The state controls 92.84 percent of Bulgartabak, with the remainder held by
private companies and individuals.
Ninov said the government also planned to place 13 percent in
Bulgartabak on
the Bulgarian Stock Exchange as part of efforts to boost somnolent bourse
trade.
This would bring to 20 percent the total stake listed on the bourse. Ninov
did not say when it would be done.
He also said the government would urge the future investor to buy 70,000
tonnes of tobacco annually from growers, up from the current volume of
40,000 tonnes, which would make the holding eligible for European Union
subsidies.