Bulgarian Tobacco Giant Binding Offer Deadline Set for Aug 29

Russian authorities confirmed earlier this month that the country's second-biggest bank VTB plans the acquisition of a majority stake in Bulgartabac, but nobody in Bulgaria believes the bank is acting on its own behalf and on its own terms. File photo

The deadline for submitting binding offers for the sale of Bulgaria's former tobacco monopoly Bulgartabac is expiring Monday.

The news was reported by the Bulgarian National Radio, BNR.

Under the rules of the procedure the companies have to place a deposit and submit binding bids no later than August 29, while the winner should be selected in September.

There is only one bidder remaining after the end of the public procurement tender for the privatization of the cigarette-maker.

Bulgaria's privatization agency, a wholly political body, is accepting the binding offers and the deposit for participation in the amount of EUR 10 M until 3 pm Monday.

After that it will become clear if the sole standing bidder BT Invest Austria is going to commit to final participation in the privatization.

Austria-registered BT Invest, behind which Russia's second-biggest bank VTB stands, remained the only bidder for the Bulgarian tobacco monopoly after British American Tobacco and Austria-based CB Family Office Service dumped the sale.

British American Tobacco, the only top-notch investor among three companies, which were expected to bid for Bulgaria's majority stake in cigarette maker Bulgartabac, withdrew from the tender on August 1.

The news came a week after Austria-based CB Family Office Service abandoned the sale, leaving BT Invest the only bidder for Bulgarian tobacco monopoly.

The move also confirmed rumors, which said British American Tobacco bought documents for the tender just with the aim of collecting information and had no plans to bid.

Even though only one bidder has remained, Bulgaria's privatization agency has said it will not scrap the tender and expect the company to submit its binding bid.

Analysts expect the offer to be low and not profitable for the state and have advised the government to nix the bidding procedure and open a new tender on new terms, which will be Bulgaria's sixth attempt to sell its former tobacco monopoly.

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 currently owns the two larger and more consolidated factories in Sofia and Blagoevgrad as well as a number of commercial brands.

When asked in the beginning of August to comment reports, according to which Ivan Savvidi, a Russian tycoon and member of parliament on the ticket of Putin's party, stands behind the sole and veiled in mystery bidder for Bulgaria's state-owned tobacco giant Bulgartabac, the Privatization Agency director Emil Karanikolov refused to elaborate on the speculations.

"The documents we have show that this is a major Russian financial group. I would not comment speculations and reports."

Russian authorities confirmed earlier this month that the country's second-biggest bank VTB plans the acquisition of a majority stake in Bulgartabac, but nobody in Bulgaria believes the bank is acting on its own behalf and on its own terms.

According to Russia media reports the bank will most probably resell the holding after winning the tender, which is the reason why it is not clear exactly who the bank represents.

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