VTB set to buy stake in Bulgarian telecom

SOFIA - Agence France-Presse

Russian lender VTB promises to reduce large debt of Bulgaria’s Vivacom. Hürriyet photo

Russia’s VTB Bank and local lender Corporate Commercial Bank have struck a deal to acquire 93.99 percent in Bulgaria’s heavily indebted former telecoms monopoly Vivacom, the company said on Aug. 10.
Vivacom, majority owned by Hong Kong tycoon Richard Li’s investment vehicle PineBridge Investment but controlled by its creditor banks, has been struggling for the past two years to reduce its 1.7-billion-euro ($2 billion) debt.

VTB’s capital arm and CC Bank will pay 130 million euros to Vivacom’s major lenders, which include Royal Bank of Scotland and Deutsche Bank and which will write off a large chunk of their debts and retain minority stakes.

“The restructuring proposal includes a reduction of the total debt from about 1.7 billion euros to 588 million euros via pay-off, conversion into shares and write-off of the rest of the debt,” the company said.
After completion, expected in the fourth quarter, the two investors will also seek to buy out the remaining shares in Vivacom, which are currently floated on the Bulgarian stock exchange by their minority shareholders, the statement added.

Vivacom is the new brand name of Bulgaria’s former state-owned fixed-line monopoly BTC, which was privatised to US private equity fund Advent International in 2004. The company launched its GSM unit Vivatel in 2005.

It was sold to AIG Investments in 2007 and later to PineBridge Investments.

Servet Yeşilyurt contributed to this report from Istanbul.