Банкеръ Weekly



Early next week, the parliamentary group Coalition for Bulgaria is going to inform the Prosecutor's Office about violations in the sale of the Bulgarian Telecommunications Company (BTC). The main reason which the red coalition pointed at was the fact that the sale had not been approved by the Supervisory Board of the Privatisation Agency (PA). During a meeting of the parliamentary economic and transport and telecommunications committees on March 10, the two deputy PMs Nikolay Vassilev and Lidiya Shouleva were expected to explain details of the telecom deal, but they failed to clear up the doubts about it. The sales agreement signed with the Austrian Viva Ventures company on February 20 has not been approved by the PA supervisors, therefore it is legally unstable, the supervision member Nikola Koichev said. According to the Coalition for Bulgaria Deputy Chairman Roumen Ovcharov, the supervisors have only viewed an earlier agreement before the government changed some of its parametres. The document was put forward on July 31, 2003, while the decision of the Council of Ministers on its amendment is dated August 8, 2003, Roumen Ovcharov underlined. However, Lidiya Shouleva advised the parliamentary members to bring their questions to the court.The MPs were also willing to hear how much of the EUR230MN (the price at which BTC is sold) will be attracted funds and how much of it is the buyer's own money. Still, the vice premiers were unable to give them an answer, explaining that it wasn't them but the PA director who signed the agreement. I don't know why you are asking me, but still I think the financing scheme of the deal is not important at all.What is important is that behind Viva Ventures there is a serious investor such as the US Advent investment fund which owns 100% of the shares of the buying company, Nikolay Vassilev said. Meanwhile, it was reminded that Viva Ventures is not allowed to transfer its shares in the telecom in the next three years and if, for any reason, it goes bankrupt the state will be able to get the shares back while the buyer will pay a 100% default.It is also unclear what will happen with the deal if the Commission for Regulation of Telecommunications fails to give BTC a GSM licence. Last week the PA Executive Director Iliya Vassilev announced that the agreement with the buyer contained a clause saying that if there was no mobile operator licence granted, the Austrian company might give up the acquisition. But it became clear during the debates in the parliamentary committees on March 10 that the Government is not considering legal amendments in order to guarantee the telecom a licence without a tender or competition. In fact, legal experts are firm that if BTC gets such permission in violation to the telecommunication law, the deal is not going to leave the prosecutor's office for at least several years. The Commission for protection of Competition will have to make a decision on the case, too.

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