BAT withdraws from Bulgaria cigarette maker sale

British American Tobacco has decided not to bid for Bulgarian cigarette maker Bulgartabak, citing market and strategic reasons, the privatisation agency said on Monday.

BAT’s withdrawal leaves only Austria-registered BT Invest, controlled by Russia’s state bank VTB , eyeing a majority stake in the company, which has two cigarette mills and a tobacco processing plant.

Bulgartabak factory

Bulgartabak factory

“BAT’s withdrawal does not make the tender not valid. It can continue with one bidder, and the privatisation agency decision will depend of the quality of the bid,” an agency spokeswoman said.

“As we have said, Bulgartabak will not be sold at any cost,” she said.

This is the fourth attempt by Bulgaria to put the company in private hands and is part of the centre-right government’s efforts to bolster public revenue in the wake of a recession and ensure a market for Bulgarian tobacco.

The agency is expecting a binding bid for a 79.8 percent stake in the company by Aug. 29.

The remaining 20.2 percent is already floated on the Bulgarian Stock Exchange.

Previous attempts to sell the company have failed due to political pressure and strong lobbying from interest groups which benefit from lucrative cigarette smuggling and state-financed contacts.

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