Three Bidders Said to Eye Bulgaria's Vivacom, Deadline Extended

Business | February 17, 2012, Friday // 10:06|  views

Vivacom - formerly know as the Bulgarian Telecommunications Company (BTC) - has gone through a number of controversial privatization deals. Photo by Sofia Photo Agency

Turkey's Turkcell, the head of Bulgaria's Corporate Commercial Bank and Icelandic businessman Thor Bjorgolfsson are interested in the sale of Bulgaria's telecom Vivacom, local media reports say.

The potential buyers of debt-laden Vivacom, heir to the state-owned Bulgarian Telecommunications Company (BTC), will be expected to submit bids by February 27, but only Turkcell has officially confirmed it plans to make that move.

The deadline for submitting binding bids, initially set at February 17, will expire ten days later, Kapital daily reported, citing insiders.

It has been extended at the request of one of the potential bidders, who needed more time to take a definitive decision.

Telekom Austria AG, which already owns Mobiltel in Bulgaria, is no longer interested in the sale, according the Austrian newspaper Die Presse.

Meanwhile it emerged that Turkey's biggest mobile phone company Turkcell is looking into Bulgarian telecommunications operator Vivacom.

There was no board decision on the issue yet, Turkcell Deputy Chief Executive Koray Ozturkler told Reuters in the middle of January.

Later in an official statement, Turkcell, Turkey's biggest mobile phone company by subscribers, whose largest shareholder is the Scandinavian operator TeliaSonera, announced they are considering BTC as a potential opportunity for expanding their business in the region.

The head of Bulgaria's Corporate Commercial Bank, which is believed to finance the media group of mogul Irena Krasteva, is also interested in the sale of the country's top fixed-line operator Vivacom, according to media reports.

Tsvetan Vassilev stands behind two of the four bids for the company, previously known as BTC, local Trud daily reported in the middle of December last year, citing well informed insiders.

Icelandic businessman Thor Bjorgolfsson, who sold BTC to its current owners in 2007, is believed to be the third potential bidder for the telecom.

In this venture Bjorgolfsson has reportedly teamed up with Greek investor Panos Germanos, owner of the eponymous mobile phones chain.

At the beginning of 2006, right after the privatisation of Bulgaria's main telecom operator, Icelandic mogul Thor Bjorgolfsson acquired an option to buy a 100 % stake in Vienna-based Viva Ventures, which owned 65% in BTC. Later on the businessman bought another 25% stake with compensation instruments, raising his stake in BTC to 90%.

The acquisition of a majority share in BTC made Thor Bjorgolfsson the biggest private foreign shareholder in Bulgaria.

In September 2005 Thor Bjorgolfsson acquired 34% of Bulgaria's Economic and Investment Bank (EIBank). At the time he also owned three pharmaceutical plants in Bulgaria after he bought Balkanpharma, which later became Actavis.

Vivacom is Bulgaria's third biggest mobile operator. It also dominates the fixed-line segment with 2.9 million phone lines, which accounts for 97% of the market, but it has been losing customers at an alarming rate in recent years, due to the spread of mobile communications and alternative telecoms in the country.

Vivacom - formerly know as the Bulgarian Telecommunications Company (BTC) - has gone through a number of controversial privatization deals.

The long-drawn-out and widely criticized EUR 230 M sale deal for 65% stake in Bulgaria's telecom operator BTC was sealed at the end of February 2004 after nearly two years of procedural predicaments, legal and political battles.

Months later Icelandic businessman Thor Bjorgolfsson bought Viva's stake for EUR 300 M and resold it to the investment company AIG Central Europe for EUR 1.08 B.

AIG Investments acquired 65% of the former state-owned telecommunications firm in May 2007. Then in August of the same year it upped its investment to 90%.

Chinese telecoms and media tycoon Richard Li, chairman of Asian telco PCCW, inherited control of Vivacom in March 2010 as part of the acquisition of AIG Investments, a unit of the troubled US insurance group which spans asset management and private equity investments. The unit was renamed Pinebridge Investments ahead of the takeover by Li's Pacific Century group.

Dubai-based Oger Telecom was the closest to taking over the management of the company following negotiations that have dragged on for nearly half a year.

The deal however failed because the final offer was not satisfactory, according to insiders.
Li and Oger have been in a battle over Vivacom for the last few months after it was put for sale by US insurance giant AIG.

The BTC sale was among the top priorities of Bulgaria's centrist government of former king Simeon Saxe-Coburg, which took over in July 2001.

In 2000, the right-wing government of Ivan Kostov declined to sell BTC to the sole bidder consortium of Greek OTE and Dutch KPN which was offering USD 610 M for a 51%, in a package with a mobile licence.

The license, the country's second for a digital mobile telephone operator, was won separately by OTE in a tender in 2000 for USD 135 M.

The nation of 7.7 million people has three mobile operators, which are foreign owned. Mobiltel is controlled by Telekom Austria, Globul is the local unit of Greece's OTE.

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Tags: Globul, OTE, Mobiltel, Tsvetan Vassilev, Corporate Commercial Bank, Turkcell, turkey, Telekom Austria, Vivacom, Richard Li, Bulgarian Telecommunications Company, BTC, PCCW, AIG, Oger Telecom, Thor Bjorgolfsson


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