VTB’s Unit Wins Majority in Bulgarian State Tobacco Company
By Elizabeth Konstantinova (Bloomberg)
A unit of OAO VTB, Russia’s second- largest bank, was awarded a majority stake in Bulgaria’s state tobacco company after the sole bidder offered to pay 100.1 million euros ($145 million).
The contract with Austrian-registered BT Invest GmbH for the 80 percent stake in Bulgartabak Holding will be signed by Sept. 15, the asset-selling authority in Sofia said in an e- mailed statement today. It also needs approval of the Privatization Agency supervisory board. BT Invest was the only remaining bidder after British American Tobacco Plc, Europe’s largest cigarette maker, pulled out of the tender that ended on Aug. 29.
“VTB Capital’s international strategy envisages further expansion of our business into new geographies and markets, including central and eastern Europe,” Atanas Bostandjiev, chief executive officer of VTB Capital Plc, said in a statement.
“The current privatization process could be the first step in establishing” presence “on the Bulgarian market.”
Bulgaria, the European Union’s poorest country, is recovering from its worst recession in more than a decade and needs to raise cash to narrow its budget deficit and meet increasing social benefits payments ahead of October presidential and local elections.
BT Invest offered to invest additional 2 million lev ($1.49 million) in the first year of operation and a further 5 million lev in the second year, the state-asset company said in an e- mail. It also committed to buy 5,000 tons a year of locally grown tobacco in the next five years.