Dubai’s Oger Telecom may take the helm of Bulgarian Telco BTC

Dubai-based Oger Telecom is expected to enter the Bulgarian Telecommunications Company (BTC) as a strategic investor and assume its management, sources familiar with BTC’s debt restructuring negotiations told Dnevnik.Oger Telecom also confirmed for Dnevnik that it was part of the debt-for-equity lock-up agreement with between BTC’s owners, creditor banks and mezzanine lenders, but did not specify what exactly its role would be.The entry of a strategic sector investor in the company, implies that it has a vision for its development, while six years since its privatization BTC has been owned by financial players whose investment horizon spans three to five years.

Changes in BTC’s shareholding structure are expected within three to four months. The main creditor banks and the owners of BTC have agreed its mezzanine lenders to convert EUR 400 million (USD 559.5m) of BTC subordinated non-performing loans into equity capital of a majority owner in BTC in the form of holding company in the Netherlands. In addition the future owners, chiefly Oger Telecom, will pour EUR 125 million for capital expenditures and payment of some debts to the banks.
Currently, BTC is owned by an investor consortium represented by PineBridge Investments, a successor of AIG Investments, which through its fund AIG New Europe Fund II acquired BTC from Icelander Thor Bjorgolfsson via Dutch-registered Neff Telecom. However, the acquisition was financed with a EUR 1.5 billion debt, of which EUR 1 billion from banks and mezzanine lenders is on the balance sheet of BTC’s direct owner Neff Telecom Bulgaria, a vehicle of the Dutch comapany, and the remainder on the balance sheet of BTC.

The shareholders were forced to start debt restructuring negotiations as BTC failed to honour a key covenant of its loan agreement and the creditor banks chose the mezzanine lenders and Oger Telecom for the exclusive talks. Thus they ignored an alternative offer by PineBridge Investments, which according to Debtwire has offered a EUR 150 million capital injection and another EUR 150 million-200 million from the sale of assets. However, the proposal was supposed to wipe off the mezzanine obligations, which triggered a serious battle between two camps.

News source: Dnevnik a.m. link: article