bne IntelliNews -

Belgian investor Pierre Louvrier has handed back Vivacom, Bulgaria's largest telecom by revenues, to controversial Bulgarian businessman Tsvetan Vassilev.

In March, Louvrier said that his Luxembourg-registered company LIC33 had acquired a 43% stake in Vivacom, as well as majority stakes in five other Bulgarian companies, for a price of €1, on condition it took on €900mn in debt. The deal also included multiplex operators NURTS (100% stake) and First Digital, military aviation repair plant Avionams (91%), ammunitions manufacturer Dunarit (91%), as well as audience research agency GARB. 

Louvrier said that the share purchase agreement dated January 31 allowed handing back the acquired assets under certain circumstances and he was exercising this option. He said that the enterprise value of the assets only stands at €840mn.

"My reason for investing in these businesses was to facilitate the restructuring of what I believed to be a fundamentally strong group of companies. It has not been possible to get the agreement of all parties within an acceptable timeframe," Louvrier said without disclosing further details.

After Louvrier announced the deal in March, Bulgaria's government demanded official information about the origin of the funds used for the acquisitions by LIC33, which the latter said would be raised from international markets. A couple of days later, Bulgaria’s National Revenue Agency reportedly blocked the transaction without announcing the reason for the move.

On March 30, the Bulgarian competition watchdog launched a probe into the deal demanding that all companies involved in the sale inform it about the potential change of ownership. “The probe aims to determine at what stage the deal is at the moment … If the commission establishes that there has been a transfer of stakes without it being notified by the concerned parties, it may impose fines of up to 10% of the defaulting companies' turnover,” the watchdog said in a statement on its website.

Vassilev, the original owner of the assets, is also the majority shareholder of collapsed Corporate Commercial Bank (Corpbank). Last June, Corpbank, then the country’s fourth largest lender, suffered a bank run that deprived it of liquidity. It was put under central bank administration and an audit showed a BGN3.75bn (€1.92bn) capital hole. As a result, on November 6 the bank’s licence was revoked and it was declared insolvent on April 22.

Vassilev is being formally investigated over BGN206mn missing from Corpbank. He has stayed in Serbia while the scandal has been developing, and the Bulgarian authorities have been trying, unsuccessfully so far, to have him extradited. Vassilev claims that he has not committed any crime and the Corpbank collapse is a plot of his business rivals.

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.