Balkan beauty

Bulgaria’s TV industry seems to have all of a sudden developed a huge fascination for foreign investors.

Just three weeks ago we saw Mid Europa Partners, whose interests already include Serbia Broadband (SBB) and the former UPC Slovenia, snap up the Bulgarian DTH platform ITV Partner for an undisclosed fee.

Now, right out of the blue, Bulgaria’s two leading cable operators Eurocom and CableTel have been bought by Sweden’s EQT V for a combined total of over €200 million.

The cable deal is significant for a number of reasons. Besides being the largest in the CEE region this year, it will finally pave the way for consolidation in an industry that looked certain to take place over a year ago.

Indeed, we should remind ourselves that as far back as May 2008 it was confirmed that talks about a possible merger between Eurocom and CableTel – though in truth a take-over of CableTel by Eurocom – had been taking place since the beginning of the year. A deal believed to be worth some €100 million was subsequently thrashed out and even approved by the Commission for the Protection of Competition (CPC) before being finally scuppered by the global financial crisis.

Now, however, EQT V has stepped in with money that would have until recently been difficult to raise. It has been reported locally that 63% of the funding, or €125 million, is being sourced from a consortium of banks that include Calyon, ING, Unicredit Bank Austria, Weslt LB and Avenue Capital.

The new entity that will now emerge from the take-over of Eurocom and CabelTel will enjoy a near-monopoly position in Bulgaria’s cable industry, claiming some 500,000 subscribers, or 80% of the total. It will also have revenues, at least initially, of around €70 million.

Heady days indeed for an industry that until recently looked to have run itself into a dead end.