Creditors of Bulgaria's telecoms operator Vivacom will meet in the English High Court on Aug. 30 to hammer out a restructuring deal for Russian and Bulgarian banks to take over the company, Vivacom said.

VTB Capital, a unit of Russia's second biggest lender VTB Bank and Bulgarian Corporate Commercial Bank agreed to buy Vivacom, the trade name of Bulgarian Telecommunication Company (BTC), earlier this week.

Meetings with the creditors of Vivacom, whose debts amount to EUR 1.7 B will take place on Aug. 30, and a hearing of the English court is expected on Sept 6 to consider approval of the restructuring plans, Vivacom said.

"The Schemes of Arrangement (if approved) will give effect to a comprehensive restructuring of BTC and the rest of the Vivacom group that will see VTB/CCBank acquire a majority equity stake in the restructured group," the company added.

It is commonplace for companies to choose British company law as the one that will prevail in any disputes. Under British law, if 75% of creditors vote for a restructuring plan then the court will sanction it.

Under the plans for Vivacom, the two banks will invest EUR 130 M which will be used to partially repay the company's debt in exchange of 73% stake in Vivacom, the third largest mobile operator in Bulgaria after Telekom Austria 's Mobiltel and Greek OTE's Globul.

Senior creditors, which include RBS, Deutsche Bank, UBS and Unicredit among others will keep 21%. The remaining six percent is to be floated on the Bulgarian Stock Exchange.

The creditors will have to agree to a 65% cut in Vivacom's debt to EUR 588 M. They can also choose to exit their loan positions in Vivacom and if all creditors choose to do so the investors will pay them a total of EUR 617 M. The deal, subject to regulatory and competition approvals, is expected to be closed by the end of 2012.

The new owners may seek to sell the troubled telecoms firm to a trade investor in three to five years once they have put it back on its feet, the chairman of CCBank, Tsvetan Vasilev, has said.

In May 2012, Vivacom's creditors turned down an offer by Turkish Turkcell, for about EUR 800 M in cash for the 94% in the company.

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