Project description
and objectives:
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The Government of Bulgaria is selling a majority stake in Bulgarian
Telecommunications Company (BUTECO), the incumbent Bulgarian fixed line
telecom operator. The Bank is proposing to support a consortium led by Advent
International plc to acquire a controlling stake in the company. The
transaction will privatise BUTECO and aid its transition to a fully
commercially managed company.
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Transition impact:
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This transaction will privatise BUTECO, which will improve corporate
governance, financial performance and operating efficiency of the company to
that normally expected in commercially managed telecom operations. The
privatisation is one step in liberalising the sector and with deregulation in
January 2003, BUTECO will need to adapt to compete on product service aspects
and pricing as tariff rebalancing continues and when other telecom operators
enter the market.
€50 million is to be invested in the company, which together with internally
generated funds, will allow upgrading of Bulgarian telecoms infrastructure to
modernise and digitise part of BUTECO's network and improve BUTECO's IT
infrastructure. Thus improvements in BUTECO's technical and commercial
operations will benefit the retail sector and corporate consumers in terms of
choice, pricing and quality of service. Availability of competitively priced
high-quality telecoms services in central and eastern Europe is essential for
the development of businesses and overall economic activity in the region.
Thus, funding a company which will upgrade its network and differentiate
itself from its competitors through providing additional value-added services
to the wide spectrum of business and residential users, is bound to improve
the operational environment in the country.
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The client:
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Bulgarian Telecommunications Company – the incumbent Bulgarian fixed line
operator which develops, operates and maintains the national
telecommunications network and data system for Bulgaria, currently wholly
owned by the Bulgarian government.
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EBRD finance:
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Commitment to provide up to €70 million in debt financing plus up to €23
million equity funding to a consortium led by Advent International plc (the
lead investor), to purchase 65% of ordinary shares in BUTECO.
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Total project cost:
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Up to €350 million.
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Environmental impact:
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The operation was classified C/1 and an environmental audit, carried out by
independent consultants, confirmed that BUTECO is in compliance with all
relevant Bulgarian environmental, health and safety standards and regulations.
BUTECO has a unified and comprehensive worker health and safety policy and no
violations, fees or penalties have been incurred in the last three years.
In order to bring the Company in line with international environmental
management practices for the telecommunication sector, a number of issues have
been identified. These include the development of a formal environmental
policy and a proactive management system in accordance with the international
standard ISO 14001, and the introduction of a unified waste management system,
in accordance with EU and World Bank standards, which will be addressed by the
Company.
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Technical
cooperation:
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None.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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Ann Nethery, Advent International plc
Tel: +44 20 7333 0800
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EBRD contact:
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Marie Burak, Operation Leader: burakm@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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