Bulgaria's Bulgartabac Permitted to Buy Bosnian Serb Tobacco Factory

Authorities in Bosnia's Serb-dominated Republika Srpska (RS) have given the green light to the sale of the heavily indebted Banja Luka tobacco factory to Bulgarian Bulgartabac.

The government of Republika Srpska confirmed Tuesday that Antonic Trade, majority owner of the ailing tobacco factory, could sell its share to the Bulgarian cigarette maker.

The deal required government permission because Republika Srpska must withdraw a lawsuit initiated against Antonic Trade earlier in 2013 over a dispute related to the privatization of the company.

Bulgartabac has been permitted to acquire 55% of the shares of Antonic Trade plus a government-controlled stake, meaning that it will get a 67% stake of Republika Srpska's sole cigarette factory.

Zeljka Cvijanovic, Prime Minister of Republika Srpska, explained that the Bulgarian company would be obliged to maintain production levels and the existing staff for at least five years and to invest in the factory over the next three years.

Bulgartabac will also be under an obligation to buy raw tobacco from local producers if the prices and quality meet the demands of the market.

The government initiated a lawsuit against Antonic Trade in October 2012, seeking EUR 2.2 M due to a breach of the privatization contract.

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