British American Tobacco, the giant investor among the tobacco companies, which were supposed to bid for Bulgaria’s control packet of shares in cigarette manufacturer Bulgartabac, has withdrawn from the tender, officials declare.

BAT has sent an official letter, declaring that it ends its participation in the procedure due to particular strategic and commercial reasons. The given news comes after Austria-based CB Family Office Service also leaved the sale, abandoning Austria-registered BT Invest, behind which is situated Russia’s second-largest bank VTB, the only bidder for Bulgarian tobacco monopoly.

A whisper goes round that British American Tobacco bought documents for the tender only to collect some information and had never planned to bid. Several years ago BAT selected Bulgartabac buyer, but the procedure was terminated due to pressure from the ethnic Turkish Movement for Rights and Freedoms, a supporter of the government of that time, while the then Economy Minister Lidia Shuleva submitted. Since than the market share of the holding dropped to approximately 37% due to significant competition by foreign brands.

BAT and Austria-registered BT Invest were the only two companies, which purchased information on agreement before the deadline expired on July 25. CB Family Office Service, the other Austria – based company, which was supposed to present a binding offer, didn’t buy any information on memorandum.

In accordance with the rules of the present procedure the companies should place a deposit and present obligatory bids no later than August 29, while the winner should be elected in September. Now that only the bidder has remained, it is unclear how the privatization agency is going to proceed. A few months ago the manager of Bulgaria’s Corporate Commercial Bank, which is supposed to sponsor the media group, has denied that he is interested in the privatization of the country’s state tobacco giant Bulgartabac Holding.

Corporate Commercial Bank at present holds an 8.11% in Bulgartabac. The bank, which is known to sponsor the media group of mogul Irena Krasteva, holds approximately half of the money of strategic state-owned companies. The major stake - 79, 83% - in Bulgaria’s state cigarette manufacturer Bulgartabac Holding, whose direction has been strongly criticized in recent years, was put on the market on April 26 after years of delay. The slow operating procedure was officially allowed the green light by the agency of privatization and post-privatization management through a declaration in the State Gazette on May 10.

The less lucrative factories of Bulgartabac holding -situated 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 at present possesses the two bigger and more joined factories in Sofia and Blagoevgrad as well as a number of other business brands.

By Clark Moore, Staff Writer Copyright © 2011 Hot-Cigs.com All rights reserved.