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UPDATE 1-Russia's VTB eyes stake in Bulgaria telecoms firm
March 1, 2012 / 4:21 PM / 6 years ago

UPDATE 1-Russia's VTB eyes stake in Bulgaria telecoms firm

(Adds detail, background)

By Tsvetelia Tsolova

SOFIA, March 1 (Reuters) - VTB Capital, the investment arm of Russia’s second-biggest lender, is interested in buying a stake in Bulgaria’s debt-ridden telecoms operator Vivacom as a financial investment, a senior company official said on Thursday.

Atanas Bostandjiev, head of VTB Capital’s international business, said it and Bulgaria’s Corporate Commercial Bank had placed a joint bid with Morgan Stanley, which is arranging a restructuring deal for Vivacom.

VTB Capital is fully owned by Russia’s VTB Bank.

“We have interest in the Vivacom deal as a financial investor. We have placed a preliminary offer and we are actively participating in the process that is managed by Morgan Stanley,” Bostandjiev told Reuters.

“I believe in the next month there should be some development, but this is quite a complicated process,” he said.

Turkey’s biggest mobile phone company Turkcell has also said it was looking at Vivacom but has not made a decision on whether to pursue its interest.

Bostandjiev said VTB Capital’s interest did not necessarily mean it planned to manage and run Vivacom, but rather that it was participating on behalf of clients. He did not elaborate.

When asked what kind of stake VTB Capital and Corporate Commercial Bank were looking for, Bostanjiev said a majority stake or at least a managing stake with blocking minority rights.

Vivacom, a trade name of Bulgarian Telecommunication Company (BTC), is controlled by the PineBridge Investments of Hong Kong telecoms and media tycoon Richard Li, who bought its previous owner, ailing insurer AIG’s asset management arm, renamed as PineBridge.

Vivacom was lumbered with a 1.65 billion euro loan from its 2007 buyout by AIG.

The debt was then arranged by Royal Bank of Scotland , Deutsche Bank, UBS and Bank Austria among others.

The Bulgarian Capital newspaper has said Icelandic billionaire Thor Bjorgolfsson, who sold his call option in BTC to AIG in 2007 for 1.08 billion euros, was also interested in Vivacom, as well as investment fund Pamplona Capital Management.

Vivacom’s creditors are looking into ways of restructuring its huge debt.

The telecoms operator offers mobile and fixed line telephony, as well as internet and TV services to about 2.2 million customers in the Balkan country.

Its rivals include Mobiltel, controlled by Telekom Austria , and Globul, a unit of Greece’s OTE.

Vivacom’s profit dropped to 8.4 million levs in 2011 from 115.7 million the year before, due to discontinued operations, a decline in revenues from fixed services and lower retail prices.

Editing by Sam Cage and Mark Potter

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