Bulgaria Hurriedly Seals Bulgartabac Sale to Russia's VTB

Business » INDUSTRY | September 13, 2011, Tuesday // 15:28
Bulgaria: Bulgaria Hurriedly Seals Bulgartabac Sale to Russia's VTB The privatisation of the company triggered protests earlier this month by workers. Photo by Sofia Photo Agency

Bulgaria's privatization agency sealed the deal to sell cigarette maker Bulgartabac to a unit of Russia's VTB Bank on Tuesday, before the competition watchdog delivers its ruling.

The document for the purchase of a 79.8% stake in the Balkan country's dominant tobacco company was signed on behalf of the Russian bank by Alexandra Doychinova.

BT Invest, owned by Russia's second-largest bank VTB , won at the end of August a tender to buy a 79.8% stake in Bulgartabac for EUR 100 M.

The contract bans the resale of the holding in the next ten years, a condition which can be skipped through a change in the ownership of BT Invest, analysts say.

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.

The deal has sparked protests by Bulgartabac workers, who oppose the sale of the cigarette maker to the only remaining bidder in the public procurement procedure and insist that the Governing Board rejects the offer.

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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