Bulgaria telco Vivacom owners offer to squeeze out minority

The offer, published in Capital Daily newspaper, is 2.80 levs per share for a 5.91% stake, valuing the group at about 810 million levs ($557 million).

Shares in Vivacom, the brand name of Bulgarian Telecommunication Company (BTC) ended at 2.78 levs per share on the Sofia bourse on Friday.

Vivacom confirmed the details of the offer, which is valid for a month.

The offer marks the latest stage in a restructuring of the telecoms company, which was saddled with huge debts after a 2007 buyout by U.S. insurer AIG, which subsequently sold Vivacom to PineBridge Investments.

Late last year, Bulgarian banker Tsvetan Vasilev, through his company Bromak, and Russian bank VTB Bank sealed a 1.7 billion euro restructuring deal with Vivacom creditors.

Under this deal, Bromak ended up with about 43.3% of the telecoms company, VTB Bank 33.3% and a number of banks 17.5%. This was after writing off 1 billion euros of debt. The new owners VTB and Bromak pledged to delist the company 18 months after sealing the deal.

Vivacom, which has 20% of the market in terms of clients, said on Monday its net profit rose almost three-fold to 20.3 million levs last year, mainly due to cost cuts and a rise in revenues from mobile phone services.