A 5ha industrial plant in Paarl belonging to British American Tobacco was sold last week by Auction Alliance for an undisclosed amount. “Before being sold by Auction Alliance, the property had languished on the market for 4 years. Its sale demonstrates the efficacy of the auction mechanism to identify qualified buyers, and ensure that competitive, market related prices are achieved”, says Elias Tzouvanni of Auction Alliance, who has built a reputation for his ability to match buyer and seller for unique properties.

The property was originally developed by the Rembrandt Tobacco Group in 1952, and at the time was considered to be one of the most modern tobacco manufacturing plants in the world.
The large site offers an ideal redevelopment opportunity and consists of prime river facing land with numerous improvements which is bordered by three roads. The site is located to the east of the Paarl CBD, on the corner of Lady Grey and Berg River Streets.
The property, with an approximate GLA of 17900m², lends itself to retail and mixed use residential redevelopment although it is currently zoned for industry. The property boasts an industrial power supply of 4000 KVA. Current improvements include 3 large warehouse spaces, 15 000m² of land previously dedicated to sport and recreational facilities, a recreational complex, shaded parking areas and three identical residential units.

British American Tobacco Plc, Europe’s largest cigarette maker, raised 600 million euros ($828 million) from its first bond sale in 16 months. The 10-year securities were priced to yield 123 basis points more than the benchmark swap rate, according to a banker with knowledge of the transaction. That compares with a spread of 105 basis points that investors demand to hold the London- based company’s 4 percent bonds due 2020 it issued in June last year, Bloomberg Bond Trader prices show.

The maker of Lucky Strike and Pall Mall cigarettes sold bonds as European leaders hold emergency talks to ensure their week-old strategy to combat the region’s debt crisis doesn’t unwind. Greek Prime Minister George Papandreou rattled markets after announcing a parliamentary confidence vote and his desire for a referendum on the bailout plan for his country.

“Given market uncertainty it is prudent to consider issuing some longer-term debt when the window of opportunity presents itself to pre-fund 2012,” Catherine Armstrong, a London-based spokeswoman for BAT, said in an e-mailed statement. “We intend to take advantage of any windows of opportunity in November to access the markets, but as our ability to access the market is headline and sentiment driven, timing is uncertain.”

Barclays Capital, Citigroup Inc., ING Groep NV and Royal Bank of Scotland Group Plc managed the sale. The notes were issued by B.A.T. International Finance Plc.

The tobacco company said investor demand was for bonds with maturities in the 2018 to 2022 areas.

British American tobacco Plc’s (BTI: News ,BATS.L: News ) six-month pre-tax profit grew to 2.79 billion pounds from 2.28 billion pounds last year. Profit attributable to owners of the parent amounted to 1.87 billion pounds versus 1.525 billion pounds a year ago. Earnings per share for the half year were 94.0 pence, higher than 76.5 pence in the year earlier period. Adjusted earnings per share for the six-month period improved to 96.1 pence from 87.1 pence in the prior year.

The Group’s reported revenue increased 2 percent to 7.44 billion pounds from 7.30 billion pounds in the comparable period. However, organic revenue at constant rates of exchange grew by 7 percent to 7.42 billion pounds, as a result of continued good pricing momentum.

The board declared an interim dividend of 38.1 pence per ordinary share of 25 pence for the six months ended 30 June 2011, payable on 28 September 2011 to shareholders registered on either the UK main register or the South African branch register on 19 August 2011.

British American Tobacco Plc (BATS)’s Australian unit won an appeals court hearing in a bid to force the government to turn over documents relating to a plan to restrict cigarette sales to plain packages.
The Full Federal Court of Australia agreed to hear the request, according to a letter from Judge Shane Marshall, provided by British American Tobacco. No date has been set for the hearing, the company said.

Parliament is set to vote on the law in the Australian winter to limit cigarette packaging to plain dark-olive coloring with pictorial health warnings instead of company logos, Health Minister Nicola Roxon said last month. British American Tobacco has sought the legal advice the government received on the plan under Australia’s Freedom of Information Act and has been denied, the company said.

British American Tobacco “suspects that Minister Roxon hasn’t released the legal advice because it’s likely to demonstrate her plain packaging laws are flawed,” the company said in today’s statement.
Health Ministry officials didn’t respond to telephone and e-mail requests for comment.
The Australian proposal is the first in the world aimed at banning logos and color variations on cigarette packages. New Zealand, Canada and the U.K. had considered the move but dropped it out of concern it would be illegal, British American Tobacco said. The Australian proposal may infringe international trademark and intellectual property laws, the tobacco company said.

The name of the cigarette brand would be printed in a uniform font at the bottom of the package. The legislation, if passed in parliament, will take effect Jan. 1.
The government plans to spend more than A$10 million ($10.7 million) on legal fees fighting opposition to the proposal, British American Tobacco said, citing documents obtained through the FOI process.

A U.S. trial judge on Monday questioned whether a British American Tobacco PLC (BTI, BATS.LN) subsidiary remained subject to her landmark 2006 racketeering ruling against the tobacco industry. U.S. District Court Judge Gladys Kessler suggested that new legal precedent by the U.S. Supreme Court may upend her previous decision that British American Tobacco (Investments) Ltd. was liable under U.S. racketeering laws.

Kessler told U.S. government lawyers that she was “not at all clear” how they could avoid the implications of a recent Supreme Court ruling that may be favorable to BATCo.

Kessler, however, emphasized during a court status conference on Monday that her comments were not a ruling on the issue. The judge said she would consider legal arguments by both sides in the coming weeks before making a decision.

In a June ruling, the Supreme Court used a case involving National Australia Bank Ltd. (NABZY, NAB.AU) to limit the extraterritorial reach of U.S. securities laws.

BATCo now argues that the same legal logic should be used to limit the reach of U.S. racketeering laws against foreign defendants.

A BATCo lawyer said Monday that the company wants Kessler to resolve the issue as soon as possible.

Kessler famously ruled that the tobacco industry violated federal racketeering laws by engaging in a decades-long scheme to deceive the public about the dangers of smoking.

In a 2006 opinion that logged 1,653 pages, the judge ordered a variety of marketing, sales and advertising restrictions on the tobacco industry. She also required cigarette makers to issue corrective statements about the dangers of their products, which would appear on television, newspapers, product packaging and countertop displays in retail outlets.

Other defendants in the case include Altria Group Inc.’s (MO) Philip Morris subsidiary; Reynolds American Inc.’s (RAI) R.J. Reynolds Tobacco Co.; and Lorillard Tobacco Co., a unit of Lorillard Inc. (LO).

A Justice Department lawyer said Monday that the agency’s upcoming legal arguments would make clear why BATCO should remain subject to Kessler’s ruling.

Tobacco PLC (BATS.LN), an international tobacco group that houses the Pall Mall, Kent and Dunhill brands, said Monday it is proposing to reduce the number of regions in its management structure from five to four with effect from Jan. 1, 2011.

MAIN FACTS:

-A new region will be formed, Eastern Europe, Middle East & Africa, or EEMEA.

-Group’s Asia-Pacific and Americas Regions will remain unchanged, as will the Western Europe Region, or WE, apart from the inclusion of the South Eastern Europe or SEE, Area with effect from Jan. 1.

-EEMEA will be formed from all the previous Africa & Middle East, or AME, Business Units plus Russia, Ukraine, Moldova, Belarus, Caucasus and Central Asia; Andrew Gray currently Regional Director AME, will be the Regional Director.

-WE region will include all its current business units plus the South Eastern Europe Area, consisting of Romania, Bulgaria, Serbia, Montenegro, Albania and Kosovo; Jack Bowles, currently Regional Director WE, will continue as the Regional Director.

-Peter Taylor, Group Operations Director, has decided to retire at the end of May and he will be succeeded by Des Naughton, currently Regional Director, Eastern Europe; Naughton will become Group Operations Director Designate on Jan. 1 and work closely with Peter and the Global Operations and Research & Development teams.

British American Tobacco Plc’s Ugandan unit may boost output by 29 percent next year as it controls pests and diseases that destroyed the crop this year, the company said. Output in the 12 months through December may climb to 18,000 metric tons in 2011, from a projected 14,000 tons this year, Solomon Muyita, the corporate and regulatory affairs coordinator at BAT Uganda Ltd., said today in an e-mailed response to questions from the capital, Kampala.

Production will decline from 19,600 tons last year because of “a significant viral infestation” and pests’ destruction of the crop, he said.

BAT Uganda, which has contracted about 30,000 farmers to produce an estimated 0.4 hectare (1 acre) of the crop, produces mainly flue-cured tobacco, which is dried in a closed barn with heat piped from a furnace, and burley, treated in the open air, according to the company. Small quantities of lower-quality dark fire-cured tobacco are also produced.

Total output in Uganda may decline 30 percent this year from 30,000 tons in 2009, though production may recover to 35,000 tons next year because of efforts to contain the disease and pests, Muyita said.

“Other leaf producers have also been affected by the disease and overall we estimate that the national tobacco production is down by 30 percent compared with 2009,” he said.

Uganda ranks alongside Zambia as Africa’s fourth-biggest tobacco producer, after Zimbabwe, Tanzania and Malawi, according to the website of Universal Corp., the world’s biggest merchant of the leaves.

The U.S. Department of Justice and major tobacco companies continue to struggle over how to implement restrictions imposed on the industry by a 2006 court ruling. According to court filings submitted Wednesday, the parties can’t even agree on whether they’re making progress in adopting the rules issued by a federal district judge as part of a 1,653-page opinion. A group of the tobacco companies–including Altria Group Inc. (MO) and its Philip Morris USA unit, R.J. Reynolds Tobacco Co. and Lorillard Inc.’s (LO) Lorillard Tobacco Co.–wrote in a status update that they “have made no substantial progress” in resolving any of the issues.

The topics addressed include exactly what corrective statements the tobacco companies need to issue regarding the health risks of their products and which elements of the court ruling are still relevant after the Food and Drug Administration gained oversight of the tobacco industry in 2009.

The filing by the tobacco companies alleges that the government hasn’t been a good faith partner in myriad negotiations held over the past few months.

“Defendants have attempted to negotiate in good faith with the government and intervenors on these issues, but have been met with an almost total lack of responsive proposals, except on the more minor points,” the filing states. Specifically, the tobacco companies said the government hasn’t yet detailed the required corrective statements or how it proposes to judge their efficacy.

The government, meanwhile, wrote that the parties “have reached agreement on several issues and made substantial progress in reducing disagreements on several further issues.”

The government said it has begun focus group testing of various corrective statements, to be completed in early December, and will have details of its final proposals ready for submission in late January.

Despite continued disagreements, the two sides at least have resolved part of one outstanding concern. Five of the six tobacco companies have paid certain costs, totaling $391,227.52 each. The sixth, British American Tobacco PLC (BATS.LN, BTI), has argued it isn’t obligated to pay. British American Tobacco filed its status update separately on Wednesday.

Meanwhile, the tobacco companies told the court they believe a mediator or negotiator is necessary to resolve the outstanding issues, while the government said it doubted such a third-party presence would help.

The 11-year-old case dates back to a Clinton administration lawsuit alleging that nine tobacco companies and two related trade associations engaged in a 50-year conspiracy to deceive the public about the dangers of smoking.

Nassau and Suffolk County health commissioners joined Long Island’s hospitals and smoking cessation advocacy groups on Wednesday at Hofstra University to re-affirm their commitment to eliminate tobacco use across Long Island and to stand firm on their stance that the sale of cigarettes be banned in pharmacies. The press briefing and informational event jump started the groups’ support of the American Cancer Society’s Great American Smoke Out, which occurs today.
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