On the 10th of June, 2016 the VTB press service announced the completion of the bondholders’ solicitation process, and also that a change of Vivacom shareholders will occur in the near future. The sale of the operator is disputed by Vivacom’s owner Dmitry Kosarev, who owns 76% of the company. In a new interview, Mr. Kosarev explains why, in his view, VTB Capital will not be able to close the deal on the resale of the company.
Dmitry, good day, let's start with the last event. Is that true that Vivacom bondholders allowed a change of shareholders, and how it will happen?
- In the release of VTB, which is published on its website, a surprising amount of text is devoted to my modest person, and surprisingly little information is given about what was actually signed by Vivacom bondholders. And nothing there is so clear, rather the opposite - the paper signed by creditors contains a number of clear conditions that are impracticable for VTB Capital. In general, lawsuits in several jurisdictions are under way in relation to the results and organization of the "auction".
Moreover, as defendants appear both VTB Capital and members of the consortium, that VTB Capital announced as winner of the so-called "auction". The bank is well aware, because they accepted the jurisdiction of the High Court of Justice of England in our dispute with them about who has the right to do what with the Vivacom shares.
It turns out that in this case VTB Capital acts both as a seller and as a buyer, and it is also in the role of lender, and of an agent in obtaining the consent of the bondholders. A separate question relates to the sources and the structure of this deal’s funding. I think that in the course of legal proceedings, when the defendants will testify by my requests before the English court, we will learn much more interesting. For example, who is behind Spas Rusev and where he got the money to buy my company.
Could you clarify who will be the buyer of your company if the deal goes through?
- There are many questions to the company-buyer. Let me remind you, it is called Viva Telecom and at the beginning of the story that we have been told by VTB Capital, it belonged to Spas Rusev, and now it turned out that as buyers of my company are acting not only Spas Rusev, but VTB Capital itself, and also company Delta, owned by Milen Velchev - the same senior manager of the Bulgarian VTB Capital, who on the pages of Russian newspapers talked about how fair and transparent "auction" he managed to organize. In an interview with the Russian press, he explained that invitations were sent to more than 40 investors, and as a result of "hard" struggle Rusev’s company won. And it is apparent that in a consortium with Rusev we can find VTB Capital itself and Milen Velchev - just coincidence. But I do not believe in such coincidences, and I am confident that the English court will not believe in this as well. Now it is clear to everybody how honest and transparent "auction" was organized.
By the way, I would like to share an interesting detail, which became clear during our court pleadings in London. In its last press release the PR office of VTB continues to insist on calling an "auction" that, what happened in the last year in London. The lawyers of VTB Capital in their last letter to the court refuse to call an "auction" what happened last November in London: now they claim that this was a so-called "private sale". Let's see how their testimony will further change during the proceedings.
That is, you believe that "Vivacom" will not be sold as a result of the auction conducted?
- This is a difficult question, because the bank still in November last year signed with the buyer the contract of sale-trade. The fact that the deal has not yet been closed, says that a lot of people within VTB Capital are aware of the risks that they have to take following the approval of the deal. Under current conditions, if VTB Capital will close the deal, it will open up great prospects for us making a claim against the bank for more than 300 million Euro of loss caused to the company's shareholders + minority claims. In addition, the bondholders will have the opportunity to demand from the company early repayment of 400 million Euro of debt (in the case of violation of the conditions of approval of the bondholders, they have the right to demand early repayment). That is, they can, of course, against the will of the bondholders to transfer the shares to the ownership of their consortium, but only if the head of VTB Capital Yury Solovyov (head of VTB Capital - Note) would get in person from his purse 400 million Euro on the early repayment of the bonds. But, as we now can see, Mr. Soloviev prefer not to get his money, but somebody else’s, and preferably by somebody else’s hands. Now, it is obvious to me that as the mastermind of the whole process appears exactly Yury Alekseevich.
Within VTB CAPITAL they claim that the change of Vivacom shareholders has been already approved by the antitrust authorities of the European Union and Bulgaria, is not that true?
- Not exactly. Firstly, the European Commission has not agreed to the deal, and the Bulgarian regulator has been simply misled, because it has not been given all the information about the planned deal (see Release).
By the way, we have applied before the Supreme Administrative Court of Bulgaria for a review of the decision of the Bulgarian Commission for the Protection of Competition with the requirement to suspend the execution of the illegal decision. A few days ago, the entire leadership of the Commission changed, not excluding our case as one of the reasons for that, so the new decision could not be at all in favour of my opponents.
The Bank has officially confirmed just in the end of May that it is involved in the deal on the buyer's side, although I was telling so from the beginning of the "auction." Just like I announced Rusev’s name as the "front-man" a month before the end of this "auction" in London. Naturally, all of this information has not been disclosed to the Bulgarian Antitrust Commission (see Release). By the way, in Bulgaria, I filed a lawsuit demanding to cancel the decision of the Antitrust Commission regarding the permission to the deal, as its approval was based on incomplete information.
But the complete information is now available ...
- Yes, thanks to the national press. The "Kommersant" wrote that behind Viva Telecom there is a consortium standing that includes VTB Capital itself and the owned by Milen Velchev company Delta. As for the accusations against me, my opponents are good in telling people who are and who are not my friends, where I work and what I eat for breakfast, but essentially they do not give answers to the questions asked by me and by my lawyers. They do not explain how they succeed organizing this "auction", why the bank happened to act as a buyer, lender and agent in one person, and for whatever reason, trying to compensate the losses of the credit, as a result they increase the credit burden on the bank. After all, as a part of the deal with Rusev, VTB Capital is ready to give as a loan the majority of funds needed for the purchase of my company (330 million Euro). At the same time at the bank there remain as a pledge the same 100% of the "Vivacom" shares, but being of much lower quality, because the buyer is a respondent in proceedings promising multi-million losses. (According to "Kommersant" VTB buys some Vivacom shares, applications have been filed by other members of the consortium (in the press release there is information that the deal is disputed in the Supreme Administrative Court of Bulgaria), that is, VTB, as co-owner of the shares, will be defendant in the lawsuit in London).
But VTB Capital raises counter-accusations, claiming that you are not a shareholder of the company.
- In VTB Capital they like to say that I am no one and nobody, but I led the bank at the time when Yuri Soloviev, for example, just finished studying, so I have a deep understanding of all banking processes, no doubt about it. Against me has been deployed the usual dirty PR campaign. During the whole process of soliciting the consent of bondholders for a deal, I have been actively cursed in publications clearly ordered. In their irresistible desire at all costs to complete the deal with Rusev, they become more and more entangled in their own schemes. VTB Capital has openly stated both auditors and banks, and also other interested parties that I am not a shareholder of the company, but in the same time they do not clarify, who, from their point of view, is the legitimate owner. Vassilev, from whom I bought shares in the last year, publicly stated that he sold all of the shares to me. Therefore, all that is spread about me and my status of shareholder – is not true. In my arms I have all the documents giving right to the shares, and I'm going to prove in court that VTB Capital is lying. I sent a letter to the auditors of the company with the requirement to include information about the real situation with the shares in the financial statements. As far as I know, the management of the company has provided under pressure false information to auditors with respect to the share structure, thus misleading the reports’ users. This will be the subject of separate proceedings. I think that VTB Capital rightly believe that it is essentially impossible to answer to my charges, so they are trying to discredit me. Their accusations are ridiculous and make it clear that I and my staff are doing everything right, and victory will be ours.
Within VTB Capital they constantly emphasize that you have never communicated with them on the telephone, thereby explaining that they have no idea about your claims and their validity. You say the opposite. Where is the truth?
- I have argued and will argue that my lawyers have regularly contacted VTB Capital since I became the owner of "Vivacom". We sent them more than a dozen letters with the requirement to explain their position. However, they refused to communicate with me, and I was forced to go to court. The fact that the bank closes its eyes before the truth does not mean that it does not exist. Once again I want to responsibly state that I am the sole legal owner of 76% shares of "Vivacom". As for the inability to contact me or my representatives, once my opponents have not used the chance to communicate in pre-trial order, we will contact in the courtroom, let’s they there, before judges, prove that I have never contacted them. All the moves are written.
Do you have any predictions about how soon these lawsuits will end?
- Trials can last for years, but not in this case. VTB Capital could fight with me for a very long time, but it is important to note that our story is just gathering pace, and who knows what else pops up in its course. And considering that the whole process of trying to seize my company is tied to a specific person and that by his fault at VTB Capital they have all these problems, I think that the timing of our proceedings can be seriously reduced.