Four Major Players Vying for Bulgarian Telco Globul - Report

Four major telecoms companies are competing to buy Bulgarian mobile operator Globul in a deal expected to be worth about EUR 700 M, according to a report by Reuters.

Globul is controlled by OTE, Greece's biggest telecoms operator, which plans to sell its Bulgarian unit as well as satellite unit HellasSat to help refinance EUR 1.8 B of debt by early 2014.

Turk Telekom, mobile phone operator Turkcell and Norway's Telenor are carrying out due diligence on Globul, Bulgaria's second-biggest mobile operator, the unnamed source was cited as saying.

Deutsche Telekom, which has a 40 percent stake in OTE, was also eyeing the Bulgarian unit, put on sale along with electronic appliance retailer Germanos. But it will only get involved if the bids came below expectations, the source said.

"Deutsche Telekom is in the process rather to encourage the other players to make serious offers," the source said. Both Globul and OTE declined to comment.

Binding bids are said to be expected by March 18 and a deal can be expected later in March or in April 2013.

Another source is quoted as saying that OTE may also decide to cancel the sale after it secured EUR 700 M euros through a bond issue on Wednesday.

The issue covered a large part of OTE's debt repayment obligations for this year, easing its liquidity strains to the extent the company may cope with its debt even without having to sell Globul, the second source said.

OTE might want to keep Globul, which is one of its most efficient and profitable units, the second source said, but added it will continue with the procedure and make a final decision based on the bids.

Globul accounts for about 7% of OTE's sales and about 9% of earnings before interest, tax, depreciation and amortization (EBITDA).

But OTE's chief executive said late last year Globul required a lot of investments, which OTE might not be able to provide, to remain competitive in a cut-throat Bulgarian market where customers are increasingly switching to cheaper services such as pre-paid offers.

In Bulgaria, Globul competes with Telekom Austria Mobiltel and Vivacom, recently acquired by Bulgarian banker Tsvetan Vasilev, and Russia's VTB Bank.