Bulgarian Vivacom has reportedly obtained approval from the English High Court to go ahead with a restructuring arrangement valued at about €1.7bn (US$2.1bn), which will see Russia’s VTB Bank and the Bulgarian Corporate Commercial Bank (CCB) acquire…
Bulgarian Vivacom has reportedly obtained approval from the English High Court to go ahead with a restructuring arrangement valued at about €1.7bn (US$2.1bn), which will see Russia’s VTB Bank and the Bulgarian Corporate Commercial Bank (CCB) acquire a 73% stake.
The court approved the arrangement, which will enable Vivacom to reduce its total debt to about €588m, Reuters reported, referring to information provided at the London hearing.
The company has invited shareholders to an extraordinary general meeting on 8 October, where they will be asked to approve relevant amendments to an existing credit facilities agreement.
The new agreement would be between the company, wholly-owned subsidiary BTC Net, its lenders, the Royal Bank of Scotland as senior and security agent of the lenders, and four newly-established companies to be established in Luxembourg and Bulgaria, according to the meeting invitation.
If approved, the new agreement will see the company consolidate borrowings totalling about €487.4m into a single, five-year facility. The company will make an initial repayment of between €16m and €38m and pay off the rest in instalments.
In addition, an existing lender will provide a revolving credit facility of about €20m, which may be used for working capital purposes.
Vivacom announced on 7 August that it had entered into a lock-up deal with VTB and CCB regarding the restructuring. About a week later, the company provided details of its creditors’ proposed scheme of arrangement, the subject of today’s court hearing.
At the time, Vivacom said the arrangement would see VTB and CCB pay €130m to the senior secured lenders in return for a 73% stake in the company, with creditors retaining a 21% shareholding. The remaining 6% held by minority shareholders would be floated on the Bulgarian Stock Exchange. Proceeds would be used to help repay about €1.7bn in debt.
“This proposal assumes a reduction in total leverage … to approximately €588m through debt repayment, equity conversion and an outright debt right-off,” the company said in its 13 August statement.
Lenders will also have the option to sell their positions and, if all creditors decide to do so, the acquirers would pay €617m in total.
The deal, subject to regulatory approval, is expected to close in the fourth quarter of this year.
