Twelve international investors discussed with the Bulgarian government on Friday the privatization of up to 80 per cent of the state tobacco monopoly Bulgartabac Holding, announced the Economy Ministry.

The government met with 12 companies, including tobacco giants such as Philip Morris, British American Tobacco, Imperial Tobacco Group, Altadis and others, to discuss Bulgartabac's privatization.

"The investors invited to (Friday's) presentation confirmed their interest in Bulgartabac and asked for details of the privatization procedure," the Ministry said in a statement.

Economy Minister Nikolai Vassilev said on Thursday that the government planned to sell between 51 and 80 per cent of the holding instead of selling its 27 factories separately. But before making a final decision the cabinet wanted to hear the opinion of potential buyers.

Potential investors also included Papastratos, the Bank of America, HSBC, Deutsche Bank and Societe Generale, the International Tobacco Fund, Frana, and Missirian Bulgari & Standart Commercial.

The chairperson of Bulgartabac Holding's board of directors, Lyubka Kachakova, said that the working group on the privatization of the holding will consult all experts involved with the management of the holding and with the domestic tobacco industry. "Bulgaria's interests and those of the tobacco growers and processors will be protected," she said.

Bulgartabac Holding will be sold by public tender, said Apostol Apostolov, the Privatization Agency's (PA) executive director on Friday. Potential investors interested in the sale will be invited to one more presentation before the procedure is officially announced, he added.

The state controls 92.84 per cent of Bulgartabac, with the remainder held by private companies and individuals. A tender held by the previous government for 51 per cent of the monopoly failed to attract bids last year.

Bulgartabac has 22 domestic subsidiaries including 12 tobacco-processing factories, nine cigarette factories and one producer of tobacco driers, filters and packing. It also has three factories in Russia and two in the Ukraine and Romania.

Bulgaria's new coalition government that came into power in June on a platform of growth-oriented policies, pledged speedy privatization of the remaining large state-owned companies.

A potential investor would be required to retain the core business of the holding company, instead of promoting only its most profitable subsidiaries, and to buy tobacco from local growers.

The state will also require the future owner to increase the amount of Bulgarian tobacco that is purchased and processed. "We would like the current annual volume of 45,000 tons to reach 70,000 tons or more," Vassilev said.

A new contract will be signed soon to hire Creditanstalt Investment Bank as consultant in the privatization of Bulgartabac. During the previous privatization procedure, the bank and Dresdner Kleinwort Benson consulted the state.