Bulgarian tobacco firm is heading for 80pct sale to strategic investor
SOFIA (AFP) – Bulgaria will launch next week the privatization of tobacco holding Bulgartabac, Apostol Apostolov, head of the Bulgarian privatization agency, said yesterday. Bulgaria expects to sell 80 percent of the firm’s capital to one strategic investor, while 20 percent will be sold on the stock exchange. The State will, however, retain the right to veto important decisions on Bulgartabac’s future. In August, Economy Minister Nikolai Vassilev held meetings on the privatization with representatives of British American Tobacco. The US group Philip Morris is also among the potential investors, Vassilev said. Austrian bank Creditanstalt is the government’s consultant for the deal. Bulgartabac has tobacco treatment subsidiaries in Russia, Ukraine, Romania and the former Yugoslavia which are operating at a loss, according to its management. Under communist rule, which collapsed in 1989, tobacco and cigarette exports made up 50 percent of Bulgaria’s farming exports. The future buyer of Bulgartabac must agree to support Bulgaria’s tobacco producers by using Bulgarian tobacco to produce cigarettes both within the country and abroad, according to the privatization strategy. Tobacco farming is the main occupation among Bulgaria’s Muslim minority living in the south of the country. Although this was well-paid under communist rule, thanks to exports to the Soviet Union and other Eastern European countries, a crisis at Bulgartabac during the transition years sparked a serious deterioration in the standard of living in these regions.
