Investors Seek Delay in Turkey Tobacco Firm Sale

Source from:  sg.news.yahoo.com Reuters ANKARA, Jan 7 01/08/2008

Some investors interested in the sale of Turkish state tobacco firm Tekel Cigarette have requested a postponement to the Jan. 25 deadline for bids, one of the investors told Reuters on Monday. Their move follows a hike in the country's special consumption tax on tobacco and last week's decision by parliament to ban smoking in most enclosed public spaces such as bars, cafes and restaurants. The ban will take full effect in 18 months. "We asked for a postponement of the final date for bids in the tender because of the need to complete preparations concerning the new tobacco law, which can be considered quite radical, and the special consumption tax issue," said the investor, who declined to be named. The Privatisation Administration has not yet decided whether to grant the request. Turkey has several times postponed the sale of the former monopoly, which has a 40 percent share of the domestic market with annual sales of $8 billion. Its market share stood at 60 percent in 2001 when Ankara first said it would sell the firm. The sale is part of a broad privatisation programme backed by the International Monetary Fund. British American Tobacco and Japan Tobacco are among international firms which analysts have said they expect to bid, while Turkish conglomerate Dogan Holding said last month it had linked up with Citi Venture Capital International to prepare a bid. Turkey is the world's eighth-biggest cigarette market, with Turks smoking 103 billion cigarettes a year. Broker JP Morgan has valued Tekel at $1.0-1.6 billion. Last Thursday, Turkey followed Germany, France and many other European countries in deciding to outlaw smoking in bars and restaurants, though it remains to be seen how well the ban can be implemented in a country long addicted to nicotine. Enditem