Банкеръ Weekly



The divestment procedure for Bulgartabac Holding will be launched within two months, most probably in February 2004, Deputy Premier and Minister of Economy Lidiya Shouleva said in Parliament in the middle of the week. On December 10, the National Assembly approved a strategy for the sale of the tobacco conglomerate. It stipulates that the holding's subsidiaries and enterprises abroad should be sold separately. Part of the state-owned 80% stake in Bulgartabac Holding will be offered in the last stage of the privatisation, too. According to information of the BANKER weekly, that will be a small stake in the parent company and will be sold through the Privatisation Agency (PA). Anyway, the State will keep at least 51% of the holding's capital, competent PA experts say, because this is the only way for it to control whether buyers of individual tobacco factories implement the commitments they have taken. The agreements for the subsidiaries will be prepared and signed by Bulgartabac Holding's Supervisory and Management Boards. Therefore, the parent company will be the only one able to control the implementation of the commitments.A consultant for the preparation of the deals is to be chosen in a competition soon. Interest has been shown by Citibank, Creditanstalt, Morgan Stanley, JP Morgan, and Credit Suisse First Boston, Ms. Shouleva said. So far, talks have been held with representatives of Philip Morris and British American Tobacco who have long ago declared to be interested in the coming privatisation of the Bulgarian tobacco plants, she added.The main disagreement of the opponents to the strategy was provoked by the fact that the proposed method for privatisation did not provide transparency and opportunity for control (deals will be made under the Commercial Code, like any other sale of assets). That's why the chosen sales method was called a strategy of multiplying corruption schemes.Also criticized was the proposal to use part of the plants sales revenues for payment of subsidiaries' debts, as well as for establishment of a fund supporting the social effects of the divestment.However, the fund will also raise money from the budget. What remains unused will be added to the budget as dividends and tax on profit. Did you ask Bulgartabac Holding private shareholders whether they agree with using potential dividends for the payment of delayed salaries and social programs?, the Coalition for Bulgaria MP Mihail Mikov attacked. Giving ministers the power to run privatisation revenues and direct them to dead companies means allowing money drain, his colleague from the United Democratic Forces (UDF), Vesselin Tcherkezov, said.Surprisingly, even deputies from the Movement for Rights and Freedom (MRF) asked that the ministers pay attention to the planned distribution of the privatisation revenues. The ruling majority approved the strategy with 112 votes.

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