Bulgaria OKs Bulgartabac sale to Russia-backed bidder

31st August 2011, Comments 0 comments

Bulgaria's privatisation agency said Wednesday it had given the go-ahead to the acquisition of state cigarette maker Bulgartabac by a Russia-backed company that was the sole bidder.

The company BT Invest GmbH, registered in Austria but majority-owned by Russia's VTB Bank, offered 100.1 million euros ($144.5 million) for a 79.83-percent stake in Bulgartabac, or 5,881,380 shares.

The sole bidder in the last government tender after several other potential buyers failed to submit binding offers, BT Invest has pledged to invest 7.0 million leva (3.57 million euros, $5.16 million) in Bulgartabac over the next two years and purchase an annual minimum of 5,000 tonnes of home-grown tobacco over the next five years, the privatisation agency said in a statement.

The deal has to be signed within 15 days and will then require approval by the privatisation agency's supervisory board to enter into effect.

Bulgartabac currently holds 34 percent of the home cigarette market.

Bulgaria's government had already failed in several attempts to privatise the communist-era cigarette-making giant due to its requirement that any potential buyer guarantee minimum purchases of home-grown tobacco.

Previous privatisation attempts were also opposed by the Turkish minority MRF party in Bulgaria's government between 2001-2009, as tobacco growing is a major occupation for the country's 10-percent Turkish population.

Bulgartabac trade unions plan to stage protests against the privatisation on Friday.

© 2011 AFP

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