Vivacom has assets of EUR71m tied up in now-defunct CCBank

15 Jul 2014

Bulgarian Telecommunications Company (BTC, now branded Vivacom, although it remains registered under the former name) has revealed that it has assets of EUR71 million (USD96.6 million) tied up in its major shareholder, Bulgaria’s Corporate Commercial Bank (CCBank), which was placed under conservatorship in end-June 2014. According to a press release on the Irish Stock Exchange (ISE), at the time of the conservatorship announcement the operator estimated its cash balance in the bank at EUR6.5 million. The ISE notes that ‘Vivacom continues to generate positive cash flows from operating activities and the financial position of the company is stable, with more than EUR20 million of cash in its other servicing banks.’ However, the company which placed bonds valued at EUR400 million at the ISE in November 2013 has yet to deliver some of its agreed payments.

As previously reported by TeleGeography’s CommsUpdate, in November 2012 a majority interest in Vivacom was acquired by Viva Telecom Bulgaria (VTB), a holding company controlled by Russia’s VTB Capital Bank and CCBank. VTB paid EUR130 million (USD165 million) for a 93.99% stake in Vivacom, as well as agreeing to pay off EUR588 million of debt. By end-August 2013 the new majority owner had acquired all of the telco’s shares; three months later the company changed its legal status to a stock company, and was de-listed from the Bulgarian Stock Exchange (CBSE). Shortly after, in November, the operator issued bonds for EUR400 million in order to refinance its existing obligations; the bonds were listed on the ISE for a five-year period, with Credit Suisse (B&D) and VTB Capital Bank acting as coordinators for the deal; Barclays and Deutsche Bank assumed the role of intermediates, while Societe Generale acted as co-manager of the listing.

Meanwhile, following the Bulgarian National Bank’s (BNB’s) decision to revoke CCBank’s licence, ratings agency Standard & Poor’s (S&P) has downgraded the operator’s credit ratings outlook to negative. S&P pointed out that it is now unlikely that Vivacom will refinance a loan of EUR150 million from CCBank (which reportedly holds 43% of the operator’s shares), and attempts to swap the credit with a new loan prior to its maturity in May 2015 are likely to be unsuccessful, due to strong competition in the Bulgarian telecoms sector and the country’s weak macroeconomic framework.

Bulgaria, Vivacom (BTC)