Банкеръ Weekly



A special fund will be established by mid-June in order to cover the social costs resulting from the privatisation of Bulgartabac Holding. The decision was made by the holding's Supervisory Board at a meeting, held on May 19. The fund will be registered as a non-profit legal entity. The first amount will be deposited as soon as the fund is established. The money will come both as donation from the holding's profit and from international and governmental programmes providing personnel training and small business crediting.The collected money will mostly cover overdue wages and compensation payments, due for personnel dismissals in the structures of Bulgartabac. Compensations paid in the different factories vary between 3 and 16 gross salaries. Up to now unpaid remunerations have totalled BGN4.7MN. Most of them have accumulated in six of the 22 ailing holding subsidiaries. Vice Premier and Minister of Economy Lidiya Shouleva has also admitted that their financial state was not good. Stock exchange data make it clear that first quarter losses have been reported by Haskovo BT (BGN1MN), Assenovgrad BT (BGN353,000), Parvomay BT (BGN307,000), Gotze Delchev BT (BGN225,000), Pazardzhik BT (BGN122,000), and Dupnitza BT (BGN20,000).In order to guarantee the conscientious utilization of money from the fund, its management will include representatives of the tobacco factories' employees. The terms and order of applying for financing will be prepared jointly with the trade unions.In fact, the establishment of such a fund is stipulated by Bulgartabac Holding's privatisation strategy, worked out last November.We expect the consultants from Morgan Stanley to submit us the schedule and the approach for the sale of the tobacco factories within two weeks, Ms. Shouleva told journalists. Results from a marketing research on the interest in the individual companies, offered for sale, will be known then, as well as how many of these companies could operate independently. This is necessary because the companies will be sold to different investors. We do not intend to sell the enterprises to one buyer who would then keep the monopoly in the sector. On the contrary, we want the privatisation to create competition and therefore liberalization of prices in the branch, the Minister of Economy underlined. Ms. Shouleva added that investors were attracted by the market which sells 22 billion cigarettes a year, and not by the equipment most of which is in a very poor condition.Companies such as Philip Morris, British American Tobacco, Imperial Tobacco, Gallagher Group, and the Korean monopolist Korea Tobacco have so far announced interest in the Bulgarian tobacco enterprises.

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