Incumbents Await Talks Wrap-up to Unblock Bulgaria's Tobacco Deal

Business | March 26, 2003, Wednesday // 00:00

The parliamentary groups of the ruling party Simeon II National Movement and the predominantly ethnic Turkish Movement for Rights and Freedoms (MRF), junior partner in the ruling coalition, postponed once again their meeting on the privatisation of Bulgaria's tobacco monopoly Bulgartabac, scheduled for March 26.

This is the second time that the meeting has been postponed, after a day earlier the two parliamentary groups on Bulgartabac failed to reach an agreement and rescheduled it.

The palriamentary groups will hold their meeting after the wrap up of the negotiations between the Privatisation Agency and Deutsche Bank on contentious items in the privatisation contract for Bulgartabac, Plamen Panayotov, floor leader of the Simeon II National Movement announced.

Asked whether the deal for Bulgartabac could fail, he answered that the chances are fifty-fifty.

Privatisation Agency and the cabinet are currently holding negotiations and try to reach an agreement, compatible with the privatisation strategy, approved by the Parliament, Deputy Prime Minister and Economy Minister Vassilev said earlier.

In the words of Minister Vassilev the deal won't be inked at any price.

Earlier in the day left-wing Coalition for Bulgaria and right-wing United Democratic Forces called on the ruling majority to stop the privatization of Bulgartabac.

UDF claims the deal is doomed to failure, while the left-wing opposition says that the deal must be finalized after the Constitutional Court rules on the cases that seek to revoke the amendments to the Privatisation Act.

In the middle of March Bulgaria's Parliament approved the Cabinet's decision for naming EUR 110 M bid of Deutsche Bank-owned Tobacco Capital Partners a winner for 80% stake in Bulgaria's tobacco monopoly Bulgartabac.

Ahmed Dikme, Agriculture Minister from the Movement for Rights and Freedoms, is said to oppose the idea of Deutsche Bank to terminate the practice of fixing minimum purchase prices for the local tobacco crop.

Kemal Eyup, lawmaker of the Movement for Rights and Freedoms, said the buyer could be other than Tobacco Capital Partners. He reiterated that the buyer must guarantee minimum purchase prices for the local tobacco crop.

On the other hand Tobacco Capital Partners opposes the demand to refrain from divesting Bulgartabac equity over a period of five years after the deal is signed.
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