A VTB Capital-led consortium, which includes its local partner Tzvetan Vassilev, the sole owner of Bromak EOOD, has acquired a controlling stake in Vivacom, an integrated telecom operator in Bulgaria. The deal is part of the continued expansion of VTB Capital’s business in the CEE region.
A VTB Capital-led consortium, which includes its local partner Tzvetan Vassilev, the sole owner of Bromak EOOD, announces the acquisition of a controlling stake in Vivacom, a leading integrated telecom operator in Bulgaria. This deal is part of the continued expansion of VTB Capital’s business in the CEE region, and demonstrates the firm’s ability to execute highly complex and sizeable transactions.
The acquisition was completed at the same time as the balance sheet restructuring via a EUR 130mn equity injection from the consortium. This amount was partially used to repay the company’s debt in exchange for a controlling stake in the restructured company. Vivacom will benefit as a result of this transaction, with total leverage being reduced from approximately EUR 1.7bn to EUR 588mn through debt repayment, equity conversion and debt write off.
Alexei Yakovitsky, Global CEO at VTB Capital, noted: “The Vivacom deal demonstrates VTB Capital’s global capabilities. We have been able to draw on our team’s unique set of skills and expertise to bring this complex project to a successful conclusion, despite the challenging market conditions. It also provides a strategic foothold in one of Bulgaria’s most important and fastest growing sectors. It is a testament to the strength of the team in our Sofia office, which was only opened at the beginning of this year, that we are already closing major transactions such as this and helping a range of clients to tap into the potential of this under-explored market.”
Atanas Bostandjiev, CEO, UK and International of VTB Capital plc, said: “VTB Capital has mobilised considerable resources to put together and implement the agreed restructuring with Vivacom’s creditors, and we are convinced that the outcome is positive for all parties. It will enable Vivacom to operate under an adequate capital structure, capitalise on its market leading position and leverage its integrated product platform. Moreover, the telecoms sector provides exposure to one of the most stable areas of consumer demand, which has withstood the global economic downturn and shows encouraging growth prospects.”
Tzvetan Vassilev, the founder and owner of Bromak EOOD, noted: “The acceptance of our joint offer by Vivacom’s creditors is very important to us, because we see it as a sign of confidence that we can turn the company around. We are sure that we shall be able to meet the challenge by relying on our considerable experience and knowledge of the local market. By joining forces with a global bank such as VTB Capital, we can supplement our expertise in recovery management and help Vivacom achieve its full potential to become a national leader in the telecommunications sector.”