Банкеръ Weekly



Three months appeared insufficient for the experts of the Commission for Protection of Competition (CPC) to solve one of the essential disputes about the sale of the Bulgarian Telecommunications Company (BTC) which they themselves provoked. In fact, the future of the deal itself depends on that dispute. In the end of last week the 3-month term expired in which the anti-monopolistic commission had to decide whether ceding the GSM licence to the telecom without a tender or competition, at 75% reduction of the initial licence fee, was a form of state assistance and if so, whether it was admissible. On September 7, the commission, headed by Petko Nikolov announced that the term would be extended because the experts from the University for National and World Economy (UNWE) who were entitled to prepare the stand have failed to meet the deadline. With regards to a written request from the experts' group appointed by the university, the commission signed an annex to the agreement to prolong the time for preparation of a complex expertise of the BTC deal and the launching of the third GSM operator, the commission explained. The new deadline is September 30, 2004. Then the commission will have to examine the whole documentation and announce an opinion, the CPC PR Nora Stoichkova told the BANKER weekly. However, she could not tell when the decision would be taken.In fact, this is the second time the term is extended. The first deadline was July 6, but the CPC did not cope with the task and entrusted it to the UNWE experts. Obviously, they found it difficult, too. The new delay caused a rumour in the branch that attempts were being made to find a proof that the licence amount is not assistance from the state or is at least admissible. Otherwise, the deal for the sale of BTC may crack as a big bubble, because the agreement signed with the buyer, Viva Ventures, stipulates that the company is sold for EUR230MN together with a mobile operator licence. Therefore, the new owner will hardly agree to pay an extra amount up to the market value of the licence, which is BGN216MN according to the tariffs of the Commission for Regulation of Telecommunications. In case it turns out that the price paid for the licence is state assistance, there are two scenarios - either the deal will fail and the buyer will bring the state to court and force it to pay several million euros, or the missing BGN162MN will be compensated by the telecom's subscribers (about 3 million).Experts from the state administration told the BANKER weekly that the delay of the decision was not forgotten when the Competition negotiation chapter was assessed by the European Union. Observers remind that it was exactly Brussels that authorized CPC to check if the price of BTC's GSM licence could be considered assistance from the state.

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