Just a bit more than a month before its general shareholders meeting on September 23, Bulgarian Telecommunications Company’s (BTC) main concern is not that it will hand over more than 100 real estate properties to its subsidiaries, but the fact that it will officially merge with its mobile operating company Vivatel, BTC spokesperson Simona Chakrukchieva told The Sofia Echo on August 19.

BTC plans to transfer the properties through a non-cash payment to the capital of one of several new subsidiaries, which will then be registered after being approved by the general assembly. The total market value of BTC properties around Bulgaria is 281.556 million euro, according to the report of consultancy company Forton International, Bulgarian-language Dnevnik daily reported on August 11. The company’s properties in Sofia are worth 142 million euro.

According to Chakrukchieva, these plans were made by the company in 2006 but had not yet been implemented. It is only now that the company will put this action into effect. According to the non-consolidated report from June 2008, BTC owns land and estates amounting to more than one billion leva. “Our wish is to optimise the management and the commercial exploitation of all estates that are not directly related to our activity as a telecommunication company,” she said.

However, there seems to be one exception and it is one of the most attractive BTC buildings, on Sofia’s Gurko Street right across Grand Hotel Sofia. The building is full of technical equipment but it has been put on the list with properties that will be transferred to the new subsidiaries. When questioned about this, Chakrukchieva confirmed the information.

Forton International currently evaluates the Gurko building at 44.4 million euro, making it the most costly of all 100 estates of BTC.

The September 23 general assembly will also decide which of BTC’s properties will be given for rent and which will be sold out. For each and every one of the buildings there will be a separate procedure, Chakrukchieva said. Most of the company’s estates are in Sofia but there are also some in other Bulgarian cities. The buildings in Sofia are valued at 142 million euro.

BTC already has one real estate company, BTK Imoti. Its destiny was also to be decided at the September 23 general assembly, Chakrukchieva said.

BTK Imoti was registered in 2006 and at the time, estates costing 36.78 million leva were supposed to be transferred to the company but in the last consolidated report of BTC a company with the name BTK Imoti was not included in it.

Another step to restructuring BTC, which started in 2007, is the merging with its wireless operator known as Vivatel. This is the main priority of BTC at the moment, Chakrukchieva said. BTC Group has the desire to offer more quality and complex services to its clients and will expect better economic results, she said. The company also intends to improve the effectiveness of its management and increase competitiveness.

Restructuring of Vivatel will naturally follow after the businesses have merged. According to Chakrukchieva the dismissal of several staff may become necessary too. “The people with the best [business] profile will remain [in the company],” she said.

Chakrukchieva did not respond when asked about the salaries of BTC and Vivatel’s employees, stating that they only differ slightly.

According to her, the amalgamation of the companies will also contribute to better fixed-line services. The joint company will now be able to offer package services to its customers. The monthly subscription fee for fixed lines might also fall down from the current 13 leva to about five leva, she said.

Vivatel is the third-largest mobile phone operator in Bulgaria, with a market share of about 10 per cent. The shareholders’ meeting is expected to approve its merger with BTC at the assembly.

The company’s registration as BTC Mobile will be withdrawn shortly after the approval and the telecom group will commence operation as a single entity, Intelli News agency reported on August 11. The unification will be quite a formal process and as BTC already owns the shares of Vivatel, the process will not have a big impact on the market capitalisation of the company.

The market capitalisation of BTC currently stands at 2.45 billion leva.