Banks agree to buy Bulgaria's Vivacom

Two banks have reached agreement on the acquisition of Bulgarian fixed and mobile operator Vivacom, quashing any hopes that Turkcell and Telekom Austria may have had of buying the former Bulgarian Telecommunications Company (BTC).

Reuters reported that VTB Capital, a unit of Russia's VTB Bank, and Bulgarian lender Corporate Commercial Bank (CCBank) have agreed to take over Vivacom, which carried debt of €1.65 billion. Following the completion of a restructuring plan, the deal is expected to be closed in September.

The Sofia Globe reported that Vivacom has been in the hands of creditor banks since 2010. The report added that the banks agreed to sell an unspecified majority stake in Vivacom/BTC for €130 million, while the operator's debt would be reduced to €588 million. This means that around €1 billion in debt would be written off.

The Vivacom deal is still subject to conditions including the approval of the regulatory and competition authorities. Assuming the deal goes through, it looks like the Bulgarian operator will be changing owners again in the not-too-distant future: Reuters quoted business web site Livebiz as saying that the new owners may seek to sell Vivacom to a trade investor in three to five years once they have put it back on its feet, according to the chairman of CCBank, Tsvetan Vasilev.

Turkcell and Icelandic tycoon Thor Bjorgolfsson were the only other bidders, according to The Sofia Globe.

It had previously been rumoured that Telekom Austria was also interested in the operator, primarily for its fixed assets in Bulgaria, but the Austrian telco was also believed to be concerned about the potential impact on its business of local currency devaluations.

Telekom Austria already owns Bulgarian mobile operator Mobiltel, which along with Globul, a unit of Greece's OTE, competes with Vivacom in Bulgaria.

For more:
- see this Reuters article
- see this Sofia Globe article

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