BTC sale is off - again

22 May 2003

The on-off sale of a 65% stake in national PTO Bulgarian Telecommunications Company (BTC) has been halted once again, following an appeal from US-based private equity house Advent. Advent had inked a deal to acquire the BTC stake earlier this year for EUR210 million (USD246 million), but the landmark sale was thrown out by the State Privatisation Agency’s supervisory board in early May due to alleged legal ‘inconsistencies’ in a preliminary agreement signed in April. Following the decision, the privatisation agency entered into talks with the second-ranked bidder, a consortium led by Koc Holding, which had offered EUR185 million for the same stake but promised fewer job cuts. However, the US-based group appealed to the Supreme Administrative Court to have the ruling overturned and the Agency has now said it will halt talks with Koc Holding to examine Advent’s challenge; a ruling is expected to be returned in early July. The latest debacle, in what is turning out to be a risible affair, threatens to further undermine Bulgaria’s credibility with foreign investors, which view the sell-off as crucial in determining the EU aspirant’s privatisation policies prior to it joining in May 2004.