Luxembourg-registered investor group LIC33 has revealed it will pay a token €1 for a 43.3% stake in the Bulgarian Telecommunications Company (Vivacom). However, as part of the deal it will take on the company’s €900m (US$661.4m) in debt.
In a…
Luxembourg-registered investor group LIC33 has revealed it will pay a token €1 for a 43.3% stake in the Bulgarian Telecommunications Company (Vivacom). However, as part of the deal it will take on the company’s €900m (US$661.4m) in debt.
In a media presentation in Sofia today, LIC33, chaired by Franco-Belgian entrepreneur and investor Pierre Louvrier, said it will acquire the shares in the incumbent indirectly held by Bulgarian tycoon Tsvetan Vassilev. The deal is subject to regulatory approvals.
The majority owner of Bulgaria’s failed Corporate Commercial Bank (CCB), Vassilev was charged with embezzlement after the bank was shut down and is now awaiting the outcome of extradition hearings in Serbia.
LIC33, a special purpose vehicle formed specifically for this acquisition, has also acquired Vassilev’s stakes in several other companies, including TV and radio broadcaster Nurts, which Vivacom is in the process of acquiring, TV company First Digital and media research firm Garb. The newly acquired businesses, including Vivacom and its satellite DTH asset Vivacom TV, have a combined EBITDA of about €180m to €200m, while their net debt totals €900m, according to the investment group.
LIC33 said it will move to acquire the remaining shares in Vivacom by the end of the year. Russia’s VTB Capital owns a third of the telco, while the remaining shares are held by minority investors. VTB declined to comment.
Vivacom issued a statement later in the day saying that it is “not aware of any transaction or pending transaction involving a majority stake in the company that would lead to change of control as per the indenture”.
However, the operator said its shareholders “are welcoming an expression of interest by any serious, well-funded and respected potential investor”. It stressed that any change of control would require approvals from shareholders, Bulgarian and EU regulators.
Financial and legal restructuring
LIC33 outlined its restructuring plans for the telco, saying the legal structure needs to be made more efficient and various CCB debts within it unwound.
“This goes hand in hand with repaying the debts owed to CCB,” it said.
The group said is already in talks to refinance an equity bridge loan due in May, adding that it intends “to honour proven, existing CCB debts by restructuring, servicing and refinancing them”.
It will seek financing from banks based in countries including France and Switzerland, it said.
LIC33 noted that it will also look to optimise the capital structures of the various companies.
Clearly establishing itself as acquisitive, the group said it will consider accretive M&A and business development opportunities in Bulgaria and further afield.
LIC33 noted that its financial backers are Louvier and its managing partners and that there are no outside investors or partners.
