GOVERNMENT APPROVED BULGARTABAC'S PRIVATIZATION STRATEGY

Business | February 1, 2002, Friday // 00:00| Views: | Comments: 0

Bulgaria will sell up to 80 percent of its tobacco monopoly Bulgartabac Holding by mid-year and will not set a minimum price under a privatisation strategy approved by the government on January 31. The state currently controls 92.84 percent of Bulgartabac, with the remainder held by private companies and individuals. Officials, quoted by Reuters have said up to 13 potential investors, including industry majors like Philip Morris and British American Tobacco have expressed interest in the company. Bulgartabac’s 22 domestic subsidiaries, including 12 processing factories, nine cigarette factories and one producer of tobacco driers, filters and packing as well as the company’s five subsidiaries in Russia and one each in Ukraine, Romania and Yugoslavia will be sold as a whole entity. Under the privatization strategy, the Cabinet also plans to place 12.84 percent of Bulgartabac on the Bulgarian Stock Exchange as part of efforts to boost bourse trade. The state will keep its golden share in the company so that it can retain a role in Bulgartabac's decision-making. The company is to be sold through a two-stage competitive bidding and the government would prepare a short list of five bidders at the second stage. Among other things, Bulgartabac's new owner would be obliged to keep and raise the annual amount of taxes and duties paid to the state budget. It stood at BGN 500 M last year and is expected to reach BGN 600 M in 2002. The privatisation strategy of Bulgartabac will be tabled in Parliament on February 4.

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