19 January 2006

http://www.adventinternational.com/news/PressReleases/pages/pressRelease_20060119.aspx

Advent International has granted to Novator Holdings, a company controlled by Thor Bjorgolfsson, an option to acquire Viva Ventures Holding GmbH, the holding company that owns 65% of The Bulgarian Telecommunications Company (BTC). The option may be exercised at any time up to June 2008. Until the option is exercised, Advent International remains the owner of Viva Ventures and fully involved, in its non-executive capacity, on the Board of BTC.

The transaction involves a payment that represents a successful refinancing of Viva Ventures and, thereby, an eventual exit for Advent’s financial partners, including Enterprise Investors, the EBRD, NBG Venture Capital, the Abu Dhabi Investment Authority, Alpha Associates, the Dutch Development Bank (FMO), DEG and, as agent of the mezzanine tranche, Mezzanine Management. Novator’s transaction has been financed in part by Citigroup and Landsbanki Island.

Following a lengthy two-year privatisation process, Advent International agreed the purchase, through Viva Ventures, of a 65% stake in BTC in June 2004 for 230 million euros plus a 50 million euro capital increase and an agreed minimum 400 million investment programme. Since then, BTC has substantially increased the digitalisation of its network and launched new services, including ADSL broadband. In 2004 BTC was awarded the hotly contested 3rd GSM licence in Bulgaria and, in September this year, launched BTC Mobile under the brand Vivatel. Vivatel is leveraging BTC’s infrastructure, enabling competitive pricing and service for business and consumer subscribers.

Commenting on the agreement, Joanna James, Managing Director of Advent International’s Central European operations, says: “We are very pleased with the progress made by BTC since the privatisation. Our views on the future development of the company are very similar to those of Novator and we look forward to working closely with them in the future.”

Thor Bjorgolfsson added: “BTC is today a well-run, expanding, profitable business; the company has substantial potential for further growth, within and beyond Bulgaria. As an investor alongside Advent, we have been delighted with the progress that has been wrought in BTC in the past 18 months and fully support the programme in place and the management team implementing it. The considerable interest this refinancing has attracted from international banks is also testimony to the continuing progress in the Bulgarian economy.”

Advisers on the transaction were: CMS Cameron McKenna for Advent, Linklaters for Novator and Clifford Chance for Citigroup.