Bulgaria to Take to Court Telco Buyer Viva Ventures Again
Bulgaria is considering once again legal actions against Viva Ventures, a subsidiary of London-based equity fund Advent International, which acquired a 65% stake in the state Bulgarian Telecommunications Company (BTC), in a widely criticized deal in 2004.
Viva Ventures paid EUR 230 M for the purchase and another EUR 50 M for a license to establish a third mobile phone operator in Bulgaria. It also agreed to pay BGN 18 M to the Defense Ministry in the course of two years under a classified accord for the maintenance of secret defense communications spots and war-purpose equipments.
The company however has not transferred a single payment to the ministry so far, which is the reason why it has been given a last notice by the agency for privatization and post-privatization control.
"The company has thirty days to pay what it owes or face court," the agency's executive director Emil Karanikolov told Trud daily.
This will be the third time that Bulgaria raises legal actions against BTC buyer. Besides it is expected that a fourth trial is in the offing too over charges of breaching the so-called clawback agreement, which obliged Viva Ventures to pay EUR 78 M to the state in the case of BTC re-sale.
The long-drawn-out EUR 230 M sale deal for 65% stake in Bulgaria's telecom operator BTC was sealed at the end of February, 2004 after nearly two years of procedural predicaments, legal and political battles.
Months later Icelandic businessman Thor Bjorgolfsson bought Viva's stake for EUR 300 M and resold it to the investment company AIG Central Europe for EUR 1.08 B.
AIG Investments acquired 65% of the former state-owned telecommunications firm in May 2007. Then in August of the same year it upped its investment to 90%.
The BTC sale was among the top priorities of Bulgaria's centrist government of former king Simeon Saxe-Coburg, which took over in July 2001.
In 2000, the right-wing government of Ivan Kostov declined to sell BTC to the sole bidder consortium of Greek OTE and Dutch KPN which was offering USD 610 M for a 51%, in a package with a mobile licence.
The license, the country's second for a digital mobile telephone operator, was won separately by OTE in a tender in 2000 for USD 135 M.
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