Empreno takes VTB Capital to court over Vivacom sale

4 Mar 2016

Empreno Ventures, which claims to own 100% of LIC Communications (previously known as SHCO), has reportedly filed a lawsuit against VTB Capital in the High Court of London in regards to the latter’s auction of Bulgarian telco Vivacom (registered as Bulgarian Telecommunications Company [BTC]), Broadband TV News reports. Empreno, which last year declared itself the 43.3% owner of Vivacom, claims that VTB Capital sold the telco at a lower price than expected, resulting in losses of EUR250 million (USD273 million).

As reported by TeleGeography’s CommsUpdate, in mid-November 2015 VTB Capital (the investment-banking arm of Russia’s VTB) held an auction for the sale of the telco. Spas Roussev, a financial investor backed by VTB Capital, placed the winning bid of EUR330 million for the company; the sale price values the Bulgarian company at EUR700 million, when factoring in the existing debt of the company. 

VTB Capital was able to launch the sale process as it acted as a facility and security agent for a EUR150 million bridge financing loan given to InterV Investment, a Luxembourg-based indirect holding company of Vivacom. InterV Investment is owned by Luxembourg-based V2 Investment, itself wholly-owned by V Telecom Investment, with its main shareholders listed as follows: LIC Telecommunications (43.3%), Crusher Investment (a subsidiary of VTB Capital) (33.3%) and former creditors of the telecom led by Mr Tannenbaum (23.43%).

The loan was secured via a share pledge of 100% of InterV shares, which were all transferred to VTB Capital after InterV defaulted on its loan repayments in May 2015. Three potential buyers placed bids for Vivacom in the auction: Greece’s Olympia Group (backed by US-based hedge fund Third Point); Marc Schneider (co-founder of European cable group UPC, backed by US-based private equity fund CVC); and Roussev, though Schneider’s bid was subsequently disqualified for ‘non-conformity with the procedure’ despite valuing Vivacom at EUR850 million. Bulgaria’s Commission on Protection of Competition (CPC) approved the sale to Roussev in January 2016.

Bulgaria, Vivacom (BTC)