bne IntelliNews -

A controlling stake in Vivacom, Bulgaria's largest telecom by revenues, has been sold by fugitive tycoon Tsvetan Vassilev to Belgian investor Pierre Louvrier for €1.

The deal has sparked controversy in Bulgaria as Vassilev is still living in exile in Serbia after fleeing the country last year during the collapse of Corporate Commercial Bank (CCB), Bulgaria's fourth largest bank. He is being investigated over BGN206mn missing from the bank and Bulgarian authorities have been trying to have him extradited.

Louvrier's Luxembourg-registered special purpose vehicle LIC33 has agreed to buy a 43% stake in Vivacom and majority stakes in five other Bulgarian companies owned by Vassilev for a token price of €1, while taking on €900mn of debt.

Louvrier, who has specialised in investments in the former Soviet bloc, told a press conference on March 24 that by end-2015 the company will offer to buy the stakes of Vivacom’s other shareholders, Investor.bg reported.

Vivacom is the brand name of Bulgarian Telecommunications Company (BTC), formerly the state-owned fixed-line monopoly. VTB Capital, the investment unit of sanctions-hit Russian financial group VTB, holds a stake of around 33% in BTC and the remaining shares are held by BTC’s creditors.

In addition to Vivacom,  the deal also includes multiplex operators NURTS (100% stake) and First Digital, military aircraft repair plant Avionams (91%), ammunitions manufacturer Dunarit (91%) and audience research agency GARB.

Louvrier is a former associate director of KPMG in Moscow and a former chairman of his private investment firm CFG Capital. He has served on the boards of several companies, including Russian agricultural company Rusgrain Holding.

His connections to the Russian market have raised concerns in Bulgaria. Former Economy Minister Traicho Traikov described LIC33 as “international financial adventurers”, daily Dnevnik reported, and speculated that the company could be linked to Russian businesses affected by EU sanctions.

At his March 24 press conference, Louvrier denied any connection to either Vassilev or sanctions-hit Russian billionaire Konstantin Malofeev. He also told journalists in Sofia that “We are here to stay ... the former shareholder [Vassilev] is not coming back”, according to Reuters.

However, it is unclear whether the deal will be given regulatory approval in Bulgaria, given the connection to Corporate Commercial Bank (CCB). Vassilev holds a majority stake in CCB via his brokerage company Bromak. Much of the €900mn debt taken on by LIC33 is also owed to CCB.

On March 24, the Bulgarian government said that it follows carefully all large deals involving assets possibly linked with Vassilev and CCB. The government also demanded official information on the origin of the funds used for the acquisitions by LIC33.

Bulgaria’s central bank revoked CCB’s operating licence on November 6 after the bank's investors and the government refused to take steps to plug the BGN3.75bn (€1.92bn) hole in the bank's capital. The Bulgarian state has also issued a BGN3.5bn claim against CCB for money paid to guarantee deposits at the bank since December 4.

On March 25, the Sofia city court appointed two temporary receivers at CCB, a week after the Bulgarian parliament adopted amendments to the law on bank insolvency, to allow the urgent appointment of a temporary receiver. This follows the publication of a report showing that CCB’s assets shrank by BGN733mn to BGN1.8bn during the final quarter of 2014.