Bulgaria Sale Body Admits Mystery Veils Bulgartabac Bidders

Bulgartabac holding currently owns two larger and more consolidated factories in Sofia and Blagoevgrad as well as a number of commercial brands. Photo by Sofia Photo Agency

The head of Bulgaria's sale body has confirmed media reports that nobody knows yet who stands behind the two Austria-registered bidders for the state-owned tobacco giant Bulgartabac.

Earlier this week it emerged that only three companies will submit binding bids for the privatization of Bulgartabac Holding and only one of them is a strategic investor – British American Tobacco.

The other two companies are registered in Austria – CB Family Office Service and BT Invest. BT Invest is an Austrian investment fund, while CB Family Office Service is a consultancy based in Graz, Austria.

"These are financial groups and still nothing can be said with absolute certainty about the true owners behind them," Emil Karanikolov, Executive Director of the Agency for Privatization and Post Privatization Control, told Dnevnik daily when asked whether these could be Bulgarian nationals.

Karanikolov said that CB Family Office Service is wholly owned by the Austrian Capital Bank (Capital Bank - Oesterreich), part of Grawe. In Bulgaria it is represented by the insurance company of the same name.

"BT Invest is one of the three biggest financial groups in Russia," he added, citing the documents, which have been processed so far.

"But it is entirely possible that the two companies manage foreign assets," Karanikolov explained.

Meanwhile Trud daily reported that the other bidder - BT Invest - was registered on April 14 this year and is associated with a Cyprus investment holding company and the second largest Russian bank VTB. The company General Manager Johannes Pepelnik refused to say who stands behind the potential buyer, the daily reported.

The head of Bulgaria's Corporate Commercial Bank, which is believed to finance the media group of mogul Irena Krasteva, has denied he is interested in the privatization of the country's state tobacco giant Bulgartabac Holding.

"I don't want to buy the state-owned stake in Bulgartabac, I have not even bought documents for the tender," Tsvetan Vassilev, majority owner and chair of the Supervisory Board of Bulgaria's Corporate Commercial Bank, told Dnevnik daily.

His statement came in response to suspicions that he is linked to one of the two bidders for the state-owned cigarette-making giant, registered in Austria - CB Family Office Services and BT Invest.

"If you think I have anything to do with BT Invest, let me tell you I have no idea who stands behind them," the banker added.

At the beginning of May Vassilev told Pari daily that he can't rule out considering participation in Bulgartabac privatization, but added first he had to carefully review the procedure.

Corporate Commercial Bank currently holds a 8.11% in Bulgartabac. The bank, which is believed to finance the media group of mogul Irena Krasteva, holds nearly half of the money of strategic state-owned companies.

Asked whether he intends to sell his stake, Vassilev replied he has first to see who the buyer of the state-owned stake will be and then decide what to do.

The agency for privatization control has also declined to disclose further information about the two bidders, saying that only two offers have been opened so far.

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