Russia Confirms VTB Bank Interest in Bulgaria's Bulgartabac, Plans Resale
Russian authorities have confirmed that the country's second-biggest bank VTB plans the acquisition of a majority stake in Bulgaria's cigarette maker Bulgartabac, local media reported.
The bank will most probably resell the holding after winning the tender, Nezavisimaya Gazeta newspaper hinted by saying that it is not clear exactly who the bank represents.
Austria-registered BT Invest, behind which stands Russia's second-biggest bank VTB, remained the only bidder for the Bulgarian tobacco monopoly after British American Tobacco and Austria-based CB Family Office Service dumped the sale.
Until January 2007, the Russian government held a 99.9% stake in VTB. Thereupon, at the World Economic Forum in Davos, its CEO announced that the government would retain a 50% + 1 share and privatize the rest of company shares.
At present the government owns 75.5% of the bank via the Federal Property Agency, which has been repeatedly laying claims to assets of tobacco monopoly Bulgartabac Holding during the previous procedures for its privatization.
"It is namely thanks to Russia's claims on Bulgartabac assets that two privatization attempts have flopped so far," Nezavisimaya Gazeta claims.
Russia first laid claims to assets of tobacco monopoly Bulgartabac Holding during the second privatization procedure in 2002.
Back then Russia said it became owner of twelve Bulgartabac subsidiaries after WWII as part of reparations it received from Germany. Bulgaria was an ally of Germany during the war and Germans owned tobacco companies in Bulgaria then. In 1953 Moscow rented its Bulgarian tobacco assets to the communist cabinet in Sofia freely, but now says it has the right to claim assets in the company. In December 2002 Bulgaria officially responded to Russia's note, saying there are no legal grounds for Russia to claim Bulgartabac's property.
Three years later the issue popped up again, forcing British American Tobacco, which was selected preferred bidder for the main assets of Bulgartabac, to withdraw its EUR 200 M bid in frustration at the impasse caused by "the difficult political situation in the country".
British American Tobacco, the only top-notch investor among the companies, which were expected to bid for Bulgaria's majority stake in cigarette maker Bulgartabac in 2011, withdrew from the tender once again, on August 1.
The news came a week after Austria-based CB Family Office Service abandoned the sale, leaving Austria-registered BT Invest, behind which stands Russia's second-biggest bank VTB, the only bidder for Bulgarian tobacco monopoly.
The move also confirmed rumors, which said British American Tobacco bought documents for the tender just with the aim of collecting information and had no plans to bid.
Under the rules of the procedure the companies have to place a deposit and submit binding bids no later than August 29, while the winner should be selected in September.
Now that only one bidder has remained, it is not clear how the privatization agency is going to proceed.
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.
We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!
- » Bulgaria will receive EUR 16 Million in Compensation due to large Imports of Grain from Ukraine
- » Despite the High Prices of Eggs in Bulgaria - They are Still the Cheapest in the EU
- » TME catalogue now includes Murata and Murata Power Solutions Products
- » Bulgarian Grain producers Sell below Cost: We are no longer talking about Profit, but about Smaller Losses
- » Business Adaptation - Casinos
- » Bulgarian Livestock Breeders have Warned that the Sector is on the Verge of Bankruptcy