Bulgaria's MobilTel buyout sets records for
Financial News Online - 27 May 2004, Caroline Meehan - A
private equity consortium has bought MobilTel, Bulgaria's biggest
mobile operator, in a €1.2bn ($1.5bn) deal which is central and
eastern Europe's largest leveraged buy-out.
A consortium of seven private equity groups led by ABN Amro Capital,
Citigroup Investments and Communications Venture Partners, an Austrian
private equity firm specialising in wireless telecoms, put €450m
of equity in the deal to acquire 40% of the company.
Three existing investors, Austrian private investors Martin Schlaff,
Josef Taus and Herbert Cordt, have cashed in part of their 70% stake
and now own 60%. Bawag, an Austrian bank, has sold its 30% stake.
Citigroup advised MobilTel Holdings, the holding company which represents
interests of the original four owners.
The deal is a sought-after triple play for Citigroup, which along
with equity and M&A advice, lead-arranged debt financing jointly
with ABN Amro and ING. Citigroup said is Bulgaria's largest debt
financing, with a syndicated corporate euro loan of €650m. MobilTel's
net cash balance of €100m makes up the remainder of the financing.
The consortium did not appoint an external adviser.
The change in ownership structure had sparked market speculation
of a trade sale.Telekom Austria said this week it is interested
in MobilTel, and Germany's Deutsche Telekom and the UK's Vodafone
said they are interested in investing in the region.
Interest has accelerated in private equity investments in central
and eastern Europe after the joining of the accession countries
on May 1. Players such as Baring Private Equity Partners, Advent
International and Central Europe Trust have established themselves
over the last decade and the availability of bank debt has been
an important driver in development of the leveraged buy-out market.
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