Банкеръ Weekly

Briefs

SALARIES RESPECTED IN VIVA VENTURES

As things are, the sale of the Bulgarian Telecommunications Company (BTC) may turn into unprecedented forcing of a decision that has nothing in common not only with economic logics, but also with the interests of the sector, the State, and the public as a whole. The more so that the decision for the telecom's sale to the Vienna-based Viva Ventures has been made without taking into account the main remarks of the Finance Ministry and BTC itself. This became clear during the week, after the INTERNET-community made public the contents of the two institutions' stances on the deal, sent to the Privatisation Agency (PA) on October 10 (i.e. two weeks prior the nomination of an exclusive buyer). However, the state officials' remarks will probably remain on paper. If in December the PA signs with Viva Ventures a contract for BTC's divestment, the consortium will return most of its money within a month. This is one of the Finance Ministry's stances - that's the price of the deal. The document reads as well that Viva Ventures' investment will be regained within 3.5 years, which makes it highly profitable for the investor. The dividends, distributed for 2002, will be in favour of the new owner, which will further shorten the term of return on the investment. Such parameters can only be obtained for deal in arms, at that not all of them, pundits comment.One more interesting detail is that if a contract is signed with the Vienna-registered Viva Ventures Holding, no tax will be charged for the distribution of dividend, because there is an agreement for avoidance of double taxation between Bulgaria and Austria, which makes the distributed dividends tax-exempt. Viva Ventures has demanded from BTC to pay EUR40MN to the management, appointed by the Austrians. Considering the current annual proceeds of the telecom, this means that the management will share 7% of them. For comparison, last year's aggregate remmuneration to BTC's personnel totalled EUR60MN.The PA has promised again that the during the negotiations with the exclusive buyer a mutually acceptable option will be sought for optimizing the deal's parameters. Viva Ventures' representatives explained they would demand a new formula for calculating telephone prices, and their attitude regardinbg the offered licence for a third local GSM-operator would be formed only after working out a business strategy for the development of the new mobile network.

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