SOFIA (Bulgaria), October 2 (SeeNews) -Bulgarian paid-TV services provider Bulsatcom, which has been struggling over the past years to service its debts, hopes to complete its restructuring by the end of October and raise some 30 million euro ($32.7 million) in fresh funds, the company's CEO said.
Following the restructuring, Bulsatcom’s liabilities will be reduced by more than 80% to around 140 million levs ($78.1 million/71.6 million euro), Max Ziff told a news conference on Tuesday.
This amount includes the fresh money, he noted, adding that Bulsatcom has already received 7.5 million euro as a down payment.
Bulsatcom's main lenders - the London-based special situations fund Blantyre Capital, the Bulgarian Development Bank (BDB) and the European Bank for Reconstruction and Development (EBRD) - will join the company as shareholders alongside Plamen Genchev, who is currently chairman of the executive board and a key shareholder.
Ziff did not disclose the size of the stakes which the lenders will control but said that none of them will be a majority owner.
"Furthermore, our business plans assume no dividends will be paid to shareholders for the foreseeable future with all available profits reinvested in the business to make Bulsatcom a better and stronger business in order to consolidate the company’s position as the No. 1 Pay TV provider in Bulgaria," Ziff added.
The company's financial troubles result from a decision in 2015 to buy a geostationary communications satellite, Bulgaria Sat. To finance the purchase, Bulsatcom borrowed 85 million euro from an international banking syndicate, Ziff recalled.
However, due to higher than expected cost of the satellite and the delay in its delivery, Bulsatcom was faced with problems in servicing its debt and in June 2017 it failed to make repayments due to the Export-Import Bank of the U.S. Subsequent payment disputes with content providers, blocked cash over legal disputes and accummulating tax liabilities aggravated the situation further even when the satellite finally went live.
($ = 0.9164 euro)