“VTB decided who to win the tender already three months ago" - believes the businessman Dmitry Kosarev

The article was originally published in Nezavisimaya Gazeta on November 16, 2015

The Russian businessman Dmitry Kosarev, who owns 76% of the shares in the Bulgarian telecom operator Vivacom, opposes the forcible takeover of his company. According to the businessman, the attack against him is led by the top managers of the bank VTB Capital (Bulgaria) Milen and George Velchevi along with some corrupt politicians. As Dmitry Kosarev himself said in an interview with the journalist of "Nezavisimaya Gazeta" Arthur Melkonyan, the strength of his opponents does not scare him, he is prepared to use all legal means to fight them.

- Dmitry, you say you own VIVACOM, what percentages of the shares are owned by you?
- I'm the only holder of Empreno, owner of LIC Telecommunications Sarl, which commands 43% of VIVACOM. LIC holds this shares from the time of Vasilev and I got LIC through Empreno. Other 33% of shares are also mine, but technically are kept on the balance sheet of the company Crusher, which were pledged against a long-repaid loan.

- The media wrote that VIVACOM defaulted on repayment of a loan of 150 million Euros and the bank sells the pledged 100% shares of VIVACOM.
- This is a statement of Milen Velchev. I think he is lying. VTB extended the deadline for repayment of the loan until December. When I learned about the plans of VTB to sell the company, I suggested the bank to refinance the loan, but received no response. Now lawyers are preparing lawsuits to bring in the courts of different jurisdictions to protect my interests.

- The maturity of the loan expires in December, does VTB have a right to declare a tender?
- That is a good question - on what basis they decided to sell shares owned by my company. According to my information Velchevi again extended the deadline for repayment of the loan. Perhaps it is their plan to seize VIVACOM and want to give the "tender" in question a decent appearance.

- VTB offered to refinance the loan, why they did not accept the proposal?
- I know for a suggestion of VTB to refinance, which Velchevi had made the company before I joined the deal. The offer envisaged unreasonable increase in company’s debt. According to my data, the bank offered almost 200 million EUR, 168 million of which were to repay the loan and the remaining 30 million Euros VTB wanted immediately to be distributed among the stakeholders So Crusher had a claim on a part of the money, as I suppose, it illegally detained 33% of the shares of VIVACOM.

Crusher received the shares as a collateral, the collateral is repaid, then the shares must be returned to the owner, i.e. to me. The suit for these 33% is brought in the International Court of Arbitration of the International Chamber of Commerce. In all public documents Crusher is cited as one hundred percent subsidiary of VTB. Open the prospectus for Eurobond issue of VIVACOM. Crusher is listed as the owner of33% of the shares and a subsidiary of VTB. But for unknown reasons Crusher is not mentioned in the list of persons associated with VTB neither on the date of the prospectus, nor now. As if someone wanted to collect part of the new loan. No wonder that the proposal to refinance the loan from VTB was not accepted.

- Meaning you are ready to refinance this debt?
- Yes, I have sent the relevant proposal to the company and the bank. But, judging by everything, VTB refuses to discuss with me the question of refinancing. Moreover, Velchev gave an interview in which he stated that he does not consider me as a shareholder of the company. It turns out that employees of VTB already assume also the right to decide who is a shareholder and who is not? And absolutely nobody is interested that I have all the documents of ownership.

- Why did you purchase garnished shares?
- We examined the situation with my lawyers and decided that purchase of Vasilev shares was possible. Vasilev is gone,  most problems are gone, we started working with those international companies that previously did not want to work with Vasilev. I contacted the minority stakeholders and I can oppose the seizing of the company. The techniques used by Velchevi are so rough and clumsy, that I am sure – the Russian leadership of VTB has nothing to do with it. So I wrote an open letter to the President of VTB Andrey Kostin asking to solve this problem. The deal is attractive in terms of the potential benefit for me. I am confident in my strengths and capabilities.

- You say Velchevi distort facts about the conflict between VTB and VIVACOM. Give an example.
- Of course. It was alleged that the tender for the sale of 100% of the pledged shares of VIVACOM is transparent. Why the company LIC, which has always had a 43-percent package and is known to all, did not get information for the tender? Velchevi may not have heard for me, but they do know LIC. They do not disclose the list of participants in this so-called transparent tender - they refuse to provide me with the documents, now when I urgently need to prepare a proposal for refinancing. Four companies participate in the tender, and over 40 investors were invited. Why such a quality asset is of interest only to four investors? Does not the dropout rate prove that the tender is not so transparent? I want to warn the others: so it appears that they become participants in an illegal scheme, which sole purpose is to take away the company from me and the minority stakeholders.

- You think the winner of the tender is already known. Who is it?
- According to my data three of the four companies - M1 Group, Olimpia and Schneider-CVC are extras. However, to my knowledge, Schneider-CVC has already sent an offer with an assessment of the company 850 million Euro, which is lower than the market price. I think Velchev will do everything possible to sell Vivacom much cheaper and exactly to Rusev. I think the consortium of Velchev and Rusev is predetermined as a winner. It turns out that VTB determined the winner of the tender three months ago. Moreover participation in this farce is provided with funds for VTB itself. You want examples of the lie of Velchevi: according to my information Velchev said that the loan recovery procedure is normal for a bank. I agree, but why VTB consolidated 100% of the debt, since originally it was involved only partially in the loan and only when it became clear that the loan will not be returned, it consolidated the debt, taking all the risks. The deadline of the tender was repeatedly extended; they are probably looking for other ways to close the deal. I think the situation becomes interesting: VTB offers the pledge by a "tender" and after an open transparent procedure with over forty participants the winner becomes a company financed by VTB, some of the stakeholders of which are managers in the bank and work on the transaction in question. The debt whose repayment is ostensibly the main reason of the bank still remains outstanding, but now not the company but Spas Rusev will be the creditor. And the same 100% shares of "VIVACOM" remain still as collateral. Complete lawlessness, I think.

- You sent letters to the Prosecutor's Office in Bulgaria and Prime Minister Boyko Borisov, did you receive an answer and will the Government of the country join you in conflict?
- Unfortunately no, or at least I do not see it. I thought that the issue affects the interests of Bulgaria. Can you imagine the problems the population will face if Velchevi brings VIVACOM to bankruptcy. VIVACOM is a sizable operator. I hope the Government of Bulgaria to intervene to resolve the issue because this affects the investment climate in the country. It is unacceptable Peevski whom some in Bulgaria call the gray cardinal to manage the authorities.

- Who is Peevski, why do you mention him, in your opinion what is his role in the attack against VIVACOM?
- When I joined in the deal they warned me Delyan Peevski had interest in this asset- a member of parliament who, according to many in Bulgaria, has an impact on the prosecution and investigation authorities in the country. I live in a state ruled by law and what I heard seemed strange. Now that the letters to the Prosecutor's office remain unanswered, and the government has ignored an illegal attack against VIVACOM, the impact of the gentleman Peevski seems quite considerable.

- Not only Velchevi but the Bulgarian heavyweight "athlete" are against you? How will you beat them?
- I am an Honored Master of Sports in Sambo (laughs) and a student of Harlampiev. If we are serious, I have a strong team of external consultants. My legal advisor is the London branch of Fried, Frank, Harris, Shriver & Jacobson LLP, attorneys in other countries. The most important thing is that the truth is on my side, and as we know "the power is in righteousness, the righteous is the powerful one."

- You hold a dialogue with Velchev through the media and Milen Velchev says he cannot contact you directly you, right?
- I think it is a lie. VTB has all the contacts. Also I offered VTB to examine the documents certifying my right to ownership of Empreno and the possession of chain of companies, which ends with VIVACOM. Perhaps they even refuse to review these documents.

- Why does the Bulgarian leadership of VTB communicate with the Russian press, not the Russian press office of the bank?
- The deal passed by the Bulgarian branch think is toxic. Russian VTB probably does not want to participate in it, so there are no comments. I think its Bulgarian conductors Velchevi who are in a conspiracy with Spas Rusev and politicianDelyan Peevski are fighting for the deal aimed at seizing VIVACOM. 

It is offensive that they hide behind the name of the Russian bank, which can cause irreparable damage to the image of Russian business in Europe.