SOFIA (Bulgaria), March 25 (SeeNews) – The deal for the acquisition of seven Bulgarian companies, including telco BTC, by LIC33, which describes itself as a group of companies bringing together European Union investors, may need the approval of the European Commission, Bulgarian deputy prime minister Tomislav Donchev said on Wednesday.
LIC33 said on Tuesday it has acquired for 1 euro the stakes of controversial businessman Tsvetan Vasilev in BTC, ammunition maker Dunarit, aircraft repair company Avionams, TV services providers NURTS and First Digital and audience research company Garb against a commitment to repay the companies' debts, estimated at 900 million euro ($985.3 million).
You can subscribe to our M&A newsletter here
“In order to have a real deal, to bring it to an end, various authorities need to come up with a stand [...] I suppose that the European Commission too should pronounce itself on this deal,” Donchev said in an interview for the state-run Bulgarian National Television.
Bulgaria's Commission for Protection of Competition (CPC) has not been notified yet about the LIC33 deal, the regulator's spokesman told SeeNews over the phone on Wednesday.
In CPC's view, the deal for BTC should be referred to Brussels because the telco has a very big turnover, the commission's spokesman also said.
“By law [companies need to notify the regulators about their intentions] before taking real action on acquiring control over a company,” he added.
Under the deal, LIC33 Group has acquired directly from Vasilev some 44% in BTC and majority stakes in Dunarit and Avionams.
Vasilev, the majority owner of bankrupt Corporate Commercial Bank (Corpbank), has been charged with embezzlement and is awaiting a Serbian court ruling on Bulgaria's request for his extradition from Belgrade.
On Tuesday, LIC33 chairman Pierre Louvrier told a news conference he is the sole shareholder in the group and that his team has invested their own money in the deal.
LIC33 has opened talks with creditors and plan to restructure and refinance the companies once they have been stabilised, he said, adding that it will seek partnership with international banks for this purpose. He also said LIC33 will work with the Bulgarian government and all other stakeholders in order to refinance and repay the debts owed to Corpbank.
Also on Tuesday, the Bulgarian government issued a statement, asking LIC33 to come up with official information about the source of financing of the deal.
“The Bulgarian Government is closely monitoring all major acquisitions of assets, which are thought to be linked to Corpbank and the accused Tsvetan Vasilev,” the statement read. “We insist on this in order to guarantee that investments in a European Union member state are realized only with funds acquired with the proceeds of legitimate business.”
In June, Bulgaria's central bank placed Corpbank, the country's fourth largest lender at the time, under special supervision over risk of insolvency and appointed conservators at the bank. In November, the central bank delicensed Corpbank and said it would seek the bank's insolvency after it was found to have a negative own capital. In December the Bulgarian Deposit Insurance Funde started repayments on guaranteed deposits of up to 100,000 euro at Corpbank.
The state is the bank's main creditor as it has repaid nearly 3.6 billion levs to Corpbank depositors through the Deposit Insurance Fund, Donchev said.
(1 euro = 1.95583 Bulgarian levs)