[Intl-tobacco] Bulgarian Privatization Still Stalled

[Robert Weissman]

Associated Press, 21 January 2003

Official warns Bulgarian tobacco monopoly may go bankrupt if privatization
fails
Tue Jan 21, 5:49 AM ET

SOFIA, Bulgaria - Bulgaria's agriculture minister warned Tuesday that the
state tobacco monopoly Bulgartabak Holding AD faces bankruptcy within years
if it is not privatized.

The Supreme Administrative Court canceled last year a deal to sell 80
percent of Bulgartabak to a consortium made up of Sofia-based Tobacco
Capital Partners and Dutch-registered Clar Innis, backed by Deutsche Bank
AG, for 110 million euros (about US$110 million).


The court ordered the Privatization Agency to issue a new tender. It acted
on a request by the losers in the original one who claimed there had been
procedural flaws.

Those bidders included Rosbulgartabak and Metatabak, both of Russia, and
Austria's Tobacco Holding GmbH.

"If Bulgartabak is not privatized now it will go bankrupt in two or three
years," Agriculture Minister Mehmed Dikme told reporters after a government
meeting about the company sale.

Dikme said Bulgartabak was increasingly losing its ability to compete both
at home and abroad and needed fresh investment.

Bulgartabak's businesses include 12 processing factories and nine cigarette
factories. It also has five cigarette-making factories in Russia and one
each in Ukraine, Romania and Yugoslavia.

A previous attempt to sell Bulgartabak failed in 2000, when it didn't
attract any bids at all.

Novitne
Ruling Coalition Fails to Reach Decision on Bulgartabac
2003-01-20

Members of Bulgaria's Cabinet and the leaderships of ruling Simeon II
National Movement and its junior coalition partner the Movement for Rights
and Freedoms failed to reach a definitive stand on the future privatisation
of Bulgaria's tobacco monopoly Bulgartabac. Different variants for
Bulgartabac privatisation were discussed at the several -hour meeting.
Another meeting will most probably be held on January 21, Dimitur Tsonev,
spokesman of the government, said. He specified that the format of the
meeting is still to be fixed.

The meeting on January 20 comes days after Bulgaria's Privatisation Agency
asked only Russia's consortium Rosbulgartabak and Austria's Tobacco Holding
Gmb to confirm the validity of their bids for an 80% stake in Bulgaria's
tobacco giant. The third candidate, Tobacco Capital Partners, was not
mentioned in the statement.

Last week Ahmed Dogan, leader of the Turks ethnic party Movement for Rights
and Freedoms, said it was time for lawmakers to take a decision on
Bulgartabac privatisation. In the opinion of Yunal Tassim, MP of the
Movement for Rights and Freedoms, and Valeri Dimitrov, chair of the
parliamentary economic committee, there are no obstacles for Bulgaria's
tobacco giant privatisation to be concluded with the participation of
Deutsche Bank.