Bulgartabac, whose state management has been questionable in the recent years, will be put on the privatization table after its privatization has been mulled for years.
Last week Finance Minister Simeon Djankov reiterated earlier announcements that Bulgaria’s government is determined to go ahead with the planned sale of the country’s tobacco company, the biggest military plant and the minority stakes in electricity distributors.
The sale of Bulgartabac Holding AD, Sopot-based Vazovski Mashinostroitelni Zavodi or VMZ, and the minority stakes in the electricity distributors have been said to be a must-do task in 2011 due to the sorry performance of the state-owned companies.
The privatization method – i.e. whether Bulgartabac will be sold through a tender, an auction, or on the Sofia Stock Exchange – will be decided in the coming weeks. It will be proposed by Citibank, the consultant preparing the sale of the state company.
The Economy Ministry, as cited by the Dnevnik daily, said Citibank has made preliminary inquiries with about 100 potential strategic and financial investors from around the world with respect to Bulgartabac’s privatization in order to make sure that all “serious” investors that are not aware of the sale of the Bulgarian cigarette company.
According to the Ministry, there is a sufficient number of companies interested in the privatization of Bulgartabac because it is an attractive asset even in a time of crisis. The method of privatization will be selected based on the number of interested bidders.
The Economy Ministry said it wants to find a buyer for Bulgartabac by the summer of 2011.
In spite of declarations in April 2010 that Bulgaria’s Privatization Agency hoped to complete the sale of state-owned cigarette monopoly Bulgartabac in 2010, no such deal went through by the end of December 2010.
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 still owns the two larger and more consolidated factories in Sofia and Blagoevgrad as well as a number of commercial brands.