LONDON – Top tobacco companies such as BAT and Altria are meeting with the management of Turkish state cigarettes-to-salt conglomerate Tekel as the deadline looms for a forthcoming privatization. Ankara has set a cutoff date of September 26 for expressions of interest in Tekel’s cigarette business, which sources involved in the deal said was expected to fetch between $2 billion and $3 billion. BAT and Philip Morris’s Altria, maker of Marlboro cigarettes, have both shown preliminary interest, alongside Japan Tobacco, Imperial Tobacco, Altadis and the Korea Tobacco and Ginseng Company, the sources said. The cigarette makers have sifted through Tekel’s financial books and heard management presentations, the sources added. «They’re doing due diligence, they’ve had site visits, and they’re having management presentations this week,» one source familiar with the sale said. The Turkish government has said it plans to sell its Tekel alcohol and tobacco monopoly as part of a series of privatizations that it hopes will raise $4 billion in total and satisfy pledges made to the IMF in return for billions of dollars in lending. Other assets up for sale include a stake in oil refiner Tupras, petrochemical producer Petkim and sugar producer Turk Seker. Tekel’s tobacco arm is expected to raise the most cash, the sources said, given Turkey’s ranking as the world’s sixth-largest cigarette market. Tekel produces about 115 billion cigarettes a year. Bankers also believe the tobacco business could fetch a high price, given the success of recent cigarette privatizations in Morocco, Serbia and Italy, which were all concluded at prices well above initial expectations. Revised bids will be scheduled for November, the sources said. A shortlist will then be drawn up and a winner selected or the finalists will be put through a further round of open auctions, the sources added. Although the preliminary interest has been healthy, one of the main issues that potential bidders will need to consider will be the state of Tekel’s production infrastructure, which is in dire need of modernization and rationalization. «You’d get to buy a big market share all in one go, but there’s a lot more work needed before we could stick a price on it,» said a source close to one of the possible bidders. «Another issue is whether it’s really worth all of the management time to stay in the process,» the source added. All the cigarette makers, except Japan Tobacco, would not comment, except to say they were still evaluating their options in Turkey.