* Strategic, financial investors invited to buy Bulgartabak
* Winner expected to be picked up in September
* Price, purchase of local tobacco key for successful bidder (Adds detail, background)
SOFIA, April 26 (Reuters) - Bulgaria opened a long-delayed tender to sell its majority stake in state cigarette maker Bulgartabak as it tries to boost public revenue and ensure a market for Bulgarian tobacco.
The privatisation agency invited strategic and financial investors to buy tender documents by June 10. Binding offers have to be filed by August 28, the agency said on Tuesday.
The Balkan country is offering to sell its 79.8 percent in the company, which has two cigarette mills and a tobacco processing unit. The remaining 20.2 percent is already floated on the Bulgarian Stock Exchange.
Bulgaria has been slow to offload state assets fearing it may lead to serious job losses and a spike in social discontent.
But it also needs the proceeds to cut its fiscal deficit to 2.5 percent of gross domestic product this year from 3.9 percent in 2010 and avoid pressure on its currency peg to the euro.
The government had pledged to sell Bulgartabak by the end of 2009 in an open auction but the plan failed to attract investor interest and the cabinet hired Citigroup to structure a deal, estimated to be worth 100 million euros ($145.3 million).
"The sale aims to keep and develop the activities of the company, ensure a market for Bulgarian tobacco and attract investment," privatisation agency head Emil Karanikolov said.
Japan Tobacco, the world's No.3 cigarette maker, Korea-based Kt&G and Philip Morris, as well as several financial investors, have expressed initial interest in the deal, Karanikolov told reporters.
The winner, to be picked in September, would be obliged to buy out about 60,000 tonnes of Bulgarian tobacco a year for its production for at least five years, Karanikolov said.
This will be the fourth attempt to sell the holding, which was first slated for sale 10 years ago. Analysts have said political bickering and interest groups benefiting from lucrative cigarette smuggling and state-financed contracts with the company have blocked a deal.
The sale is also politically sensitive because many of the Balkan country's ethnic Turks, who make up about 10 percent of the population of 7.4 million, are tobacco growers.
The cabinet has recently signed a deal to provide 143 million levs ($106.2 million) in subsidies to tobacco growers for this and next year.
"We are trying to ensure a market for Bulgarian tobacco. If the price was the only target, Bulgartabak should have been sold a long time ago. But we have a number of economic and social challenges here," Karanikolov said.
Bulgartabak holds a dominant market share of 37 percent and posted a profit of 5.8 million levs ($4.3 million) for 2010. (Reporting by Tsvetelia Tsolova and Irina Ivanova; Editing by Jon Loades-Carter) ($1 = 0.6883 euro = 1.346 leva)