Bulgartabac Privatization Said to Be Three Weeks Away

Source from:  Tobacco Reporter 04/01/2011

The privatization of Bulgaria's state cigarette-manufacturer, Bulgartabac, will be completed in three weeks, according to a Novinite story quoting Emil Karanikolov, head of the country's Agency for Privatization and Post-Privatization Control. Karanikolov is said to have told Bulgarian National Radio yesterday that the deal was close to being finalized. But in an apparent effort to dampen expectations, he said that price would not be the main aspect of the privatization. If price had been the main factor, Bulgartabac would probably have been sold a long time ago. The government had to find a balance between price and social factors in order not to scare away investors; so one of the provisions likely to be included in the privatization deal would prevent the buyer from making drastic layoffs or renegotiating labor conditions, at least during the first 2-3 years after acquisition. Karanikolov said also that the government was considering including clauses for imposing requirements on the volumes and timings of buying Bulgarian-grown leaf tobacco. Leaf tobacco sales accounted for 3.5 per cent of Bulgartabac's income last year. Bulgartabac last year made a net profit of BGN20 million, which was 16.5 times larger than the profit it made in 2009. Its consolidated income from cigarette sales grew 22 per cent year-on-year. Bulgartabac accounts for 37 per cent of the Bulgarian market and, last year, 80 per cent of the company's production was exported, up from 53 per cent in 2009 and 31 per cent in 2008. Bulgartabac operates two cigarette plants, Blagoevgrad-BT and Sofia BT, and a tobacco processing plant, Pleven-BT. About a dozen investors, including some based in Bulgaria, Greece and South Korea, are thought to have declared an interest in the privatization of Bulgartabac. Enditem