site.btaVTB Capital Has Hired Ernst & Young for Immediate Sale of Vivacom

VTB Capital Has Hired Ernst & Young for Immediate Sale of Vivacom

Sofia, October 28 (BTA) - VTB Capital, the investment-banking arm of Russia second-largest bank Vneshtorgbank (VTB), has hired global advisory firm Ernst & Young to help it with an immediate sale of Vivacom, VTB Capital AD CEO Milen Veltchev told BTA on Tuesday.

"The transaction will by no means affect the operation of BTC," Veltchev stressed. "We are happy with the way the company is managed."

VTB Capital and Corporate Commercial Bank agreed to take over Vivacom (the brand name of the Bulgarian Telecommunications Company (BTC), which is now Bulgaria's largest telecoms operator in terms of revenue, in 2012, Reuters reported. Vivacom's shareholders include fugitive Bulgarian banker Tzvetan Vassilev, who was at the centre of a scandal last year when a bank he majority-owned, Corporate Commercial Bank, was hit by a run on deposits and shut down.

"Capital" weekly reported that Vassilev owns a little over 43 per cent of Vivacom, VTB Capital slightly over 33 per cent, and the remaining slightly over 23 per cent belong to a group of the companyТs creditors, the largest one being American Michael Tennenbaum.

VTB Capital is able to launch the sale process as it is a facility and security agent for a 150 million euro bridge financing loan that was given to InterV Investment, a Luxembourg-based indirect holding company of Vivacom, and on which a payment default occurred in May.

The loan was secured by 100 percent of the shares of InterV, so the shares went to VTB Capital after the default, Reuters also reports.

"We hope to see this process resolved swiftly," said Veltchev, quoted by Reuters. "We are confident in recovering the amount owed. Vivacom remains a robust business with solid financials and healthy balance sheet."

According to "Capital", the bridge loan was extended by VTB and another nine banks in November 2013 and was due for repayment on May 22, 2015. VTB declared the loan non-performing, meanwhile bought out the receivables of all other banks that had contributed money, and went ahead with foreclosing on the collateral: 100 per cent of the shares in InterV Investment. The Bulgarian weekly argues that VTB targets taking over the telecom and then selling it yet again with a simplified and cleared ownership structure. "Capital" said that three of the four bidders for InterV Investment (and, indirectly, for Vivacom) "play in the VTB team": Vienna-based private investor Ronny Pecik, VTB Capital, and Spas Roussev (who represents the minority shareholders in Vivacom). According to the weekly, the only bidder unconnected to VTB is American Mark Schneider.