On August 30, 2016, the sale of 100% of shares in InterV Investment S.a.r.l. (InterV), a Luxembourg-based holding company for Bulgarian Telecommunications Company EAD (BTC), was successfully completed. The company was acquired by Viva Telecom, a consortium headed by Spas Roussev, its largest shareholder, and various minority investors, including VTB. The sale was initiated following a non-payment default at maturity in May 2015 on the €150 mn bridge financing facility issued to the previous BTC shareholders.
The sale of InterV shares was realized via an open, competitive auction conducted by E&Y in London in November 2015 with participation of a number of global institutional investors. On November 20, 2015, Viva Telecom was announced as the winning participant with the final bid of €330 mn, which was significantly above the starting price of €180 mn. Following the completion, a wholly-owned subsidiary of the Bank owns 20% less one share in the equity consortium.
The transaction was partly financed through a €240 mn debt facility extended by VTB Group to Viva Telecom consortium. Viva Telecom represents a solid asset that will benefit from the stabilization of the incumbent operator’s shareholder structure, and an effective investment platform that will allow the new owners to consolidate Vivacom’s leading positions in the Bulgarian telecom market and streamline its operations.
The deal received merger control clearance from the Bulgarian Commission for Protection of Competition. BTC also secured backing from over 87% of bondholders of the company’s €400 mn Senior Secured Notes due 2018, confirming the waiver of a possible change of control event under the notes.
Various attempts by entities claiming affiliation with the previous majority shareholder to frustrate the enforcement process in Luxembourg have proven futile, and their frivolous allegations have not gained traction with any of the regulators in jurisdictions involved. Such attempts should be viewed as unfair competitive practices by the previous shareholder, who failed to meet debt obligations.
BTC, which operates under the brand name Vivacom, is the former state incumbent telecommunications operator privatized in 2004. It is the largest telecommunications company in Bulgaria in terms of revenues and subscribers and holds leading positions in fixed and mobile communications, as well as in IPTV services.
JSC VTB Capital, the Investment Business of VTB Group, is one of the three strategic business arms of VTB Group, along with the corporate and retail businesses. Since its foundation in 2008, VTB Capital has participated in over 620 ECM and DCM deals, which attracted more than USD 242bn worth of investments in Russia and CIS.
VTB Capital offers a full range of investment banking products and services to Russian and international clients. It arranges deals in the debt and equity markets and is also active in trade finance, asset management and direct investments, as well as advising clients on M&A and ECM deals in Russia and abroad.