September 19, 2010 Bulgaria's privatization agency has greenlighted the contract with Citigroup Global Markets Ltd., which was picked in February to advise the sell-off of the country's state-run tobacco producer Bulgartabac. (Bulgaria - Citigroup chosen as consultant for sale of Bulgartabac..)
The final seal of approval was delayed after Raiffeisen Investment – Kamburov, which ranked second in the contest for consultant, appealed the decision only to withdraw its objections later.
Citigroup Global Markets Limited was picked in February outbidding three companies, including a tie-in between KBC Securities and Tokushev & Co, Raiffeisen investments- Kamburov and Renaissance Securities.
Citigroup Global Markets Limited represents the European investment banking arm of US-based financial services giant Citigroup. Its activities include underwriting equities and fixed-income products, equity research, and banking services for multinational corporations, middle-market enterprises, and small businesses.
At the end of last year Bulgaria's Energy, Economy and Tourism Minister, Traicho Traikov, announced that the starting price for the state share in Bulgartabac Holding would be around EUR 100 M. (Bulgaria - Citigroup chosen as consultant for sale of Bulgartabac..)
Citigroup will pocket EUR 1.018 M to carry out a legal analysis, make a sell-off assessment as well as organise and maintain a webpage. It will get 1.6% of Bulgartabac's sale price.
Bulgaria's Privatization Agency hopes to complete the sale of the state-owned cigarette monopoly in 2010. (Bulgaria - investor shows interest in state-owned cigarette monopoly Bulgartabac..)
Bulgartabac Holding currently operates two cigarette factories compared with nine in 2004 and its market share has shrank to some 40% from 60% a year earlier. The holding still owns a number of commercial brands. Two of the less profitable plants of Bulgartabac holding – in the cities of Plovdiv and Stara Zagora – were sold in 2009 on Sofia Stock Exchange. (Bulgartabac - 1st half 2010 - Bulgarian Tobacco Company Registers Huge Profit Increase..)
Bulgartabac sale is part of Bulgaria's center-right government plans to angle for strategic investors for key majors, such as the tobacco monopoly and a few energy companies, in which the state owns higher than a 50% stake. (Bulgaria - new government to speed-up Bulgartabac sale..)
The decision was taken earlier this year after the cabinet was urged to sell on the stock exchange shares in companies, which are part of the Bulgarian Energy Holding, in a bid to put the local capital market back on track.
Reference: Bulgaria's Tobacco Monopoly Sale Consultant Gets Final Ok, Novinite.com (Sofia News Agency), 9/14/2010.
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