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Sale of Bulgarian telecom BTC faces cancellation – report

Author: The Sofia Echo staff Date: Wed, May 02 2012 17523 Views
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Creditors of Bulgarian Telecommunications Company (BTC), the country's largest provider of fixed-line telephony and broadband internet, are set to pull the plug on their current efforts to find a buyer for the company, local newspaper Capital Daily reported on May 2.

Citing three separate sources familiar with the deal, the daily said that the creditors found the offers submitted by the bidders unsatisfactory.

Turkish operator Turkcell, the only strategic investor to show interest in BTC, had offered the highest cash amount, but also insisted that a significant proportion of the funds (ranging between 100 million euro and 200 million euro, according to the report) remain in an escrow account until the lawsuits filed by the Bulgarian state (for alleged privatisation contract breaches) are settled.

The other two offers, put in by financial investors – one spearheaded by former BTC owner Thor Bjorgolfsson and a consortium between local Corporate Commercial Bank and Russian banking group VTB – were too low to be considered more than in passing, the daily quoted its sources as saying.

Creditor banks took possession of BTC in 2010 after its majority shareholder PineBridge Investments (the former asset management arm of US insurer AIG, acquired by Hong Kong tycoon Richard Li) breached bond covenants. The majority of BTC's debt, estimated at about 1.65 billion euro, has been contracted as part of its acquisition by AIG from Bjorgolfsson in 2007.

The creditor banks, which include holders of senior and subordinated debt, as well as mezzanine lenders, are yet to announce a decision officially, but there was only a small chance that Turkcell's offer could be accepted in the end, Capital Daily said.

Should the sale be aborted, it was unclear what the creditors' next steps would be, but they were expected to restructure part of the debt by turning it into equity, while some debt might have to be written off. Another sale would not be attempted in the next year or two, the newspaper said, citing people familiar with the current process.Sale of Bulgarian telecom BTC faces cancellation – report

Creditors of Bulgarian Telecommunications Company (BTC), the country's largest provider of fixed-line telephony and broadband internet, are set to pull the plug on their current efforts to find a buyer for the company, local newspaper Capital Daily reported on May 2.

Citing three separate sources familiar with the deal, the daily said that the creditors found the offers submitted by the bidders unsatisfactory.

Turkish operator Turkcell, the only strategic investor to show interest in BTC, had offered the highest cash amount, but also insisted that a significant proportion of the funds (ranging between 100 million euro and 200 million euro, according to the report) remain in an escrow account until the lawsuits filed by the Bulgarian state (for alleged privatisation contract breaches) are settled.

The other two offers, put in by financial investors – one spearheaded by former BTC owner Thor Bjorgolfsson and a consortium between local Corporate Commercial Bank and Russian banking group VTB – were too low to be considered more than in passing, the daily quoted its sources as saying.

Creditor banks took possession of BTC in 2010 after its majority shareholder PineBridge Investments (the former asset management arm of US insurer AIG, acquired by Hong Kong tycoon Richard Li) breached bond covenants. The majority of BTC's debt, estimated at about 1.65 billion euro, has been contracted as part of its acquisition by AIG from Bjorgolfsson in 2007.

The creditor banks, which include holders of senior and subordinated debt, as well as mezzanine lenders, are yet to announce a decision officially, but there was only a small chance that Turkcell's offer could be accepted in the end, Capital Daily said.

Should the sale be aborted, it was unclear what the creditors' next steps would be, but they were expected to restructure part of the debt by turning it into equity, while some debt might have to be written off. Another sale would not be attempted in the next year or two, the newspaper said, citing people familiar with the current process.

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