Contract on the sale of Bulgartabac Holding JSC signed

The Bulgarian Privatization Agency (BP) and ABT Invest GM, Austria signed a contract for the privatisation of 79.83% of the capital of Bulgaria - Holding SC, announced the institution. The majority stake in ABT Invest GmbH is held by the Russian Bank for Foreign Trade via a company registered in Cyprus. The purchase price is €100.1 mln. In fact, 20% were paid yesterday, while the remainder was transferred prior to the completion of the transaction. This can happen after the Anti-Monopoly Commission authorises the deal. This is expected to happen by the end of the week.

Under the terms of the contract, the purchaser is obliged to maintain, for 10 years, the basic activity of the company in order to prevent liquidation and bankruptcy for a 5-year period. Besides, they are obliged not to reduce their stake in the company and they must purchase the minimum quantities of Bulgarian tobacco of 5,000 tonnes in the next 5 years. Furthermore, the buyer must invest a total of €7 mln in the first two years after the sale. The privatisation contract was finally approved by the BPA Supervisory Body on September 2, after, on August 31, BT Invest GmbH was selected as the company's buyer.

The approval of the privatisation bidder was preceded by protests of the employees of Tobacco Holding. Last week, it became clear that the interest of the Russian Bank for Foreign Trade (RBFT) in Bulgartabac is related to the Bulgarian businessman Atanas Bostandjiev. He is the new Head of the London office of the financial institution and knows the local market well, posted Russian Vedomosti daily, reminded the Privatization Agency. According to earlier publications of the Russian press, however, the tobacco holding company is about to be re-sold piece-meal by RBFT to strategic investors.

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