CB Family Office Dumps Bulgaria's Cigarette Maker Sale

Business » INDUSTRY | July 26, 2011, Tuesday // 15:42
Bulgaria: CB Family Office Dumps Bulgaria's Cigarette Maker Sale British American Tobacco is rumored to have bought documents just with the aim of collecting information and has no plans to bid in the tender for Bulgartabac. Photo by Sofia Photo Agency

Austria-based CB Family Office Service, one of the three companies, which were expected to bid for Bulgaria's majority stake in cigarette maker Bulgartabac, has withdrawn from the tender, officials said.

British American Tobacco and Austria-registered BT Invest are the only two companies, which remained in the final line before binding bids are submitted.

The two companies bought information memoranda before the deadline expired on July 25, the privatization agency announced on Tuesday.

CB Family Office Service, the other Austria-based company, which was expected to submit a binding offer, has not purchased an information memorandum, the officials from the agency said.

They did not comment on media reports that the company had operational problems with the bank transfer of the money needed (BGN 20,000) and may still take part in the tender.

The companies have to place a deposit and submit binding bids no later than August 29. The winner will be selected in September.

Russia's second-biggest bank VTB stands behind the Austrian investment fund BT Invest, officially announced earlier this month. CB Family Office Service is a consultancy based in Graz, Austria.

British American Tobacco, the only top-notch investor, however is rumored to have bought documents just with the aim of collecting information and has no plans to bid in the tender.

Six years ago BAT was picked Bulgartabac buyer, but the procedure was terminated following pressure from the ethnic Turkish Movement for Rights and Freedoms, an ally of the government at that time, while the then Economy Minister Lidia Shuleva resigned.

Since then the market share of the holding shrank to about 37% due to strong competition by foreign brands.

Earlier this month the head of Bulgaria's Corporate Commercial Bank, which is believed to finance the media group of mogul Irena Krasteva, has denied he is interested in the privatization of the country's state tobacco giant Bulgartabac Holding.

Tsvetan Vassilev is rumored to be linked to one of the two bidders for the state-owned cigarette-making giant, registered in Austria - CB Family Office Service or BT Invest.

Corporate Commercial Bank currently holds a 8.11% in Bulgartabac. The bank, which is believed to finance the media group of mogul Irena Krasteva, holds nearly half of the money of strategic state-owned companies.

A majority stake - 79,83% - in Bulgaria's state cigarette producer Bulgartabac Holding, whose management has been harshly criticized in recent years, was put on sale on April 26 after years of procrastination.

The long-delayed procedure was officially given the go-ahead by the agency for privatization and post-privatization control through an announcement in the State Gazette on May 10.

The bidder with the highest offer will be selected for buyer. No initial price has been set.

The consultant for the Bulgartabac sale, Citigroup Global Markets Ltd, was picked by the Bulgarian government in February 2010.

Two of the less profitable plants of Bulgartabac holding - in the cities of Plovdiv and Stara Zagora - were sold in 2009 through the Sofia Stock Exchange - for BGN 31 M and BGN 18 M respectively.

The holding currently owns the two larger and more consolidated factories in Sofia and Blagoevgrad as well as a number of commercial brands.

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