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Bulgaria’s Dominant Telecoms Provider with No State Rep

Date: 21.06.2010

The Bulgarian state has no representative in the country’s dominant telecoms provider Vivacom as the company has been delaying the vote on the government’s nominee for two months already, local reports say.

The Finance Ministry has picked Radomir Cholakov as their representative in the telecom, who will be responsible for the so-called “golden share”.

Vivacom has declined comment, but reports say the company’s refusal to convene a meeting of the board of directors is linked to the golden share challenge in court.

Bulgaria’s government has repeatedly refused to return the golden share the state owns to the joint-stock company BTC, which in early September last year merged with mobile operator Vivatel under a new brand - Vivacom.

By keeping the golden share the state will continue participating in the work of the company,. which operates 90 % of the landline phones in Bulgaria.

Originally, the state had to return the golden share until June 10, 2009.

Under the contract, the golden share that entitles the government to block decisions concerning the activity of the company has to become an ordinary one and to be sold for BGN 1 to the majority owner of the company.

Vivacom is currently owned by NEF Telecom Bulgaria, a unit of AIG Global Investment.

US insurance giant AIG bought 90% of the company's shares in August 2007 for EUR 1,4 B, later launching an offer to buy out the remaining shares.

According to reports the deal for the sale of Vivacom to Richard Li, chairman of Asian telco PCCW, is expected to be finalized in the short term,

Vivacom dominates the fixed-line segment with 2.9 million phone lines, which accounts for 97 % of the market, but it has been losing customers at an alarming rate in recent years, due to the spread of mobile communications and alternative telecoms in the country.

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