Telekom Austria, Turkcell eye Bulgarian operator Vivacom

Telekom Austria and Turkcell are both reportedly interested in buying Bulgarian fixed and mobile operator Vivacom, which is currently up for sale.

According to Austrian newspaper Die Presse, there is no information on a price as yet. The paper pointed out that given Vivacom's debt of around €1.65 billion, any acquisition would be more about taking on the debt and then implementing restructuring measures to get the company back on track.

As reported by the Sofia News Agency, Vivacom has also already gone through a number of controversial privatisation deals in the past. The former Bulgarian Telecommunications Company (BTC) is currently owned by PineBridge Investments, which in turn is owned by Hong Kong telecoms and media tycoon Richard Li.

So far, Turkcell has confirmed its interest in the Bulgarian operator, but said there is no board decision on the issue as yet, according to Reuters. Bulgarian banker Tsvetan Wassilew is also believed to be an interested party.

For Telekom Austria, Vivacom represents a potential further addition to its portfolio of Balkan companies, and the Austrian operator is currently seen as favourite among four possible suitors, according to Die Presse. Last year the company failed in its attempt to buy Telekom Serbia after the Serbian government rejected its bid.

However, since Telekom Austria already owns Bulgarian mobile operator MobilTel, its primary objective would be to purchase the fixed-line operations of Vivacom and sell off the mobile unit. This would also help it circumvent expected regulatory obstacles: the Bulgarian and European Union anti-trust authorities would likely not permit a merger of Vivacom with MobilTel.

Die Presse reported that Morgan Stanley, the investment bank appointed to handle the sale, wants to complete the sales process in the first quarter of this year. However, the paper added that an offer from Telekom Austria is not yet certain: CFO Hans Tschuden is believed to be putting up some resistance as he fears a repeat of the situation in Belarus, where a devaluation of the local currency had a negative impact on Telekom Austria's earnings.

MobilTel is currently the market leader in Bulgaria's mobile services market with 5.2 million customers and revenue of more than €500 million, according to Die Presse. Globul, owned by Greek mobile operator OTE, is the second-largest mobile operator.

For more:
- see this article from the Sofia News Agency
- see this Die Presse article (translated via Google Translate)
- see this Reuters article
- see this Sofia Echo article

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