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Dec 17, 2009 18:10 EEST
SOFIA (Bulgaria), December 17 (SeeNews) – Bulgaria will choose a consultant for the privatization of majority state-owned tobacco group Bulgartabac Holding next month, Deputy Economy Minister Evgeny Angelov said on Thursday.
“The company should have been privatized 10 years ago, because back then it held serious market positions not only in Bulgaria but also in the Russian Federation and it was valued literally in the billions,” Angelov told local Sega daily in an interview.
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The economy ministry hopes to sell all the state-owned assets of the holding group, including the cigarette factories in Sofia and Blagoevgrad together with their cigarette brands, in a package through a sealed-bid auction, Angelov said.
“Privatization through the Bulgarian Stock Exchange is not a good option, as it poses a serious risk for Bulgartabac to be bought by an offshore company or a brokerage house whose sole purpose will be to sell off the assets without any intention to continue production,” Angelov said.
One of the criteria for the selection of a buyer will be a commitment to buy certain set volumes of tobacco grown in Bulgaria, he added.
“We will prepare an assessment of the assets of Bulgartabac in order to calculate the starting price in the auction. In this process a significant weight will be given to the cigarette brands, as they are well established on the market and remain the main factor that sells the cigarettes”, Angelov said.
The ministry does not expect a serious contraction of Bulgartabac’s market share after a higher excise on cigarettes takes effect from the start of next year in Bulgaria. Bulgartabac controls around 50% of the domestic market, Angelov said.
Bulgartabak, which is 80% state-owned, comprises more than 10 subsidiaries in Bulgaria and several idled units abroad. Its privatisation has been delayed for years by political wrangling.
Bulgartabak stock closed 6.04% down at 22.22 levs in volume of 100 shares on Thursday on the Sofia bourse.
(1 euro=1.95583 Bulgarian levs)
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