Bulgarian eminence grise aims to consolidate Balkan telecoms market

Bulgarian eminence grise aims to consolidate Balkan telecoms market
Telekom Romania's Telephone Palace in Bucharest. Roussov is in talks over acquiring the Romanian telco.
By bne IntelliNews January 21, 2019

Bulgarian businessman Spas Roussev is in the process of taking over mobile operator Telekom Albania and is also eyeing assets in Bulgaria, Romania and Macedonia as he seeks to consolidate the Balkan telecoms market. 

Roussev said in mid January he is holding talks with Deutsche Telekom on the takeover of the German telecom operator’s business in Romania, capital.bg reported. Later talks would also target Deutsche Telekom’s Macedonian operations.

Roussev, who claims that there is no politician in Bulgaria who would not pick up his call, has been called by Bulgarian media one of the grey cardinals with huge influence in the country. He prefers to stay away from the lights of the media. But having acquired Bulgarian Telecommunications Company (BTC), Bulgaria’s largest telecom firm by revenue, back in 2016, he has now embarked on an attempted acquisition spree. 

At the same time, he has stepped out of one of his earlier investments. Until recently Roussev was the owner of one of the biggest football teams in Bulgaria, Levski, but he decided to sell the club in mid-January.

Commenting on the potential Deutsche Telekome deal, Roussev said: “This is the first step in my attempt for consolidation of the Balkan telecommunications market,” capital.bg reported. 

“Talks with Deutsche Telekom for their unit in Romania, where due to the size of the deal I am participating with a partner, are underway and at a later stage there will be talks on Macedonia too,” the businessman added. 

According to the Bulgarian news portal, Roussev would need a large and solvent partner to take over Telekom Romania considering the size of its operations. Telekom Romania offers both fixed and mobile services with cumulated turnover of nearly €1bn. Greece’s OTE is the main shareholder in Telekom Romania.

The revelations about Roussev’s interest in Telekom Romania follow swiftly on the news that OTE, majority owned by Deutsche Telekom, has agreed to sell its entire stake in Telekom Albania to the Bulgarian company Albania Telecom Invest, which is controlled by Roussev, together with Albania-Bulgarian investor Elvin Guri. The €50mn deal is subject to regulatory approval and is expected to be completed within the first half of this year, the German parent company said on January 16.

He is also reported to be competing with another local businessman Kiril Domuschiev, to buy Nova Broadcasting Group, which includes Nova TV, from Swedish Modern Times Group (MTG), Capital news outlet reported. The news came shortly after MTG announced that it had terminated a deal to sell Nova Broadcasting Group to Czech PPF Group and will start talks with other candidates.

Building on BTC 

Two and a half years ago Roussev bought Bulgarian Telecommunications Company (BTC), Bulgaria’s largest telecom firm by revenue that operates under the brand name Vivacom. He owns the company along with Russian VTB bank and former energy and finance minister Milen Velchev.

Roussev won the tender for BTC with a bid of €330mn the previous year. VTB Capital, the investment banking unit of sanctions-hit Russian financial group VTB, had put it up for sale in August 2015, after one of BTC’s parent companies failed to repay a €150mn bridge loan. The deal was attacked by Russian businessman Dmitri Kosarev, who asserted that he was the majority owner of BTC, having acquired the shares of fugitive Bulgarian tycoon Tsvetan Vassilev, the former owner of Corporate Commercial Bank (Corpbank) that collapsed in 2014. 

Previously he was also the centre of controversy back 2003, when his name was involved in a huge political scandal as pictures found in the car of famous smuggler Ivan Todorov – aka the Doctor — showed him on a yacht with Velchev, then transport minister Plamen Petrov and Miroslav Sevlievski, at the time an MP from the ruling NDSV party led by Simeon Saxe-Coburg-Gotha. The gathering was arranged by Roussev.

The businessman is best known for his close relationship with Saxe-Coburg-Gotha, Bulgaria’s last king and its prime minister from 2001 to 2005, and some of his ministers, including Velchev. 

There is not much information about Roussev’s early days as businessman, but his name became famous during the Saxe-Coburg-Gotha government as the alleged godfather of all young businessmen who returned from London to become ministers.

Ready to consolidate 

With their small and fragmented markets, the Balkans are ripe for further consolidation in the mobile telecoms sector, but international investors have struggled to make much headway in the region. 

Recent years have seen the failed privatisation attempts of incumbents Telekom Slovenije and Telekom Srbija. These were symptomatic of a region where previous auctions typically failed to attract bidders, got cancelled, or – where transactions did actually go ahead – were later investigated for corruption and a lack of transparency. This dismal record is despite the fact that in general telecom companies are considered attractive targets for privatisation by both strategic buyers and private equity firms, as shown by the earlier wave of investment into telecom firms across Emerging Europe.

 

News

Dismiss