Bulgarian Telco Officially with New OwnersBusiness | November 12, 2012, Monday // 12:42| views
The second largest Russian bank VTB (VTB Capital) and the Bulgarian Corporate Commercial Bank (CCB) bought over 70% of Bulgaria's telecom Vivacom / BTC. Photo by capital.bg
Bulgarian telecom Vivacom (BTC) now has a new majority owner, after NEF Telecom Bulgaria sold last week its 93.99% stake to the newly registered company Viva Telecom Bulgaria.
The information has been posted in the weekly bulletin of the Central Depository, Bulgaria's "Capital" weekly reports.
The transfer of shares, however, has not been done on a regulated market nor was a block transaction recorded on the Bulgarian Stock Exchange.
The possibility remains that the deal was made through two intermediaries which are not currently known.
BTC have confirmed Monday morning the deal in an official press release stating that the transfer of shares has become a fact after the approval of the entire plan to restructure BTC. "As result (VTB Capital) and Corporate Commercial Bank acquire the majority stake in the restructured group. The deal led to lowering the total debt of the group from EUR 1.7 B to EUR 588 M through paying off debt, transformation of shares and writing off the remaining debt," the statement reads.
BTC further point out changes in the lending contract and documentation related to it, approved at the shareholders meeting on October 8, 2012, have become effective Monday.
Now, the majority owners have to make a trade proposal to minority ones, some of which, such as the Artio Investment Fund, have blocking quotas.
The lenders' restructuring talks aimed at securing better terms and reducing the debt, which was burdening BTC, its parent company NEF Telecom Bulgaria and the holding company that owns NEF Telecom.
Under the proposed restructuring, CCBank and VTB Bank have offered to pay EUR 130 M in cash to senior lender for a majority stake, with EUR 588 M of reinstated loans.
A minority stake in BTC will be owned by the senior secured creditors.
On October 22, The European Commission gave the green light for the purchase of Bulgarian telecom Vivacom by the country's Corporate Commercial Bank and the Russian bank VTB.
The official notification about the approval of the deal was published in the newspaper of the EU on September 22 and provides joint control on the telecom through acquisition of shares.
After reviewing the facts and circumstances of the transaction, the European Commission announced that it authorized the acquisition, thus lifting the last hurdle before the final purchase, the Bulgarian National Radio reported.
The November acquisition of Vivacom by Bulgarian lender Corporate Commercial Bank and Russian peer VTB Capital was made possible by the approval of the company's shareholders of the proposed debt swap plan.
Corporate Commercial Bank and VTB Capital are acquiring at least a 73% stake in the debt-ridden telco, which is expected to be equally distributed between them.
The tie-in submitted a bid for Vivacom at the end of July and creditors accepted the offered terms a week later.
CCBank holds nearly half of the deposits by State-run companies and is widely known as the government's darling.
Vivacom - formerly known 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%. AIG Investments was rebranded to PineBridge Investments ahead of its acquisition by Richard Li's Pacific Century Group (PCG) in 2010.
Dubai-based Oger Telecom was the closest to taking over the management of the company following negotiations that dragged on for nearly half a year. The deal however failed because the final offer was not satisfactory, according to insiders.
The telco was also eyeing a Turkish new owner earlier this year, but the sale deal failed.
Vivacom is the third largest mobile operator in Bulgaria after Telekom Austria 's Mobiltel and Greek OTE's Globul.