UPDATE 1-RLPC-Bulgaria's Vivacom gets court approval for restructuring

(Adds details, background)

LONDON, Sept 6 (Reuters) - Bulgarian telecoms operator Vivacom obtained UK court approval to proceed with a 1.7 billion euro ($2.1 billion) debt restructuring, ending two years of wrangling with lenders and failed attempts to sell the company.

Under a deal approved by Mr Justice Vos in a hearing at the High Court in London, Russia’s second-biggest bank VTB Capital and Bulgaria’s Corporate Commercial Bank (CCB) are buying over 70 percent of Vivacom and existing lenders are writing off 1 billion euros of debts.

Vivacom had breached the terms on its debt covenants in 2010 after a drop in performance, putting the company in the hands of its lenders and setting off a lengthy scrap over its assets. Attempts to sell the business to third parties including Turkish mobile phone company Turkcell and Dubai’s Oger Telecom failed.

The deal joins a list of debt restructurings of distressed non-UK companies - such as German telecom company Primacom - which have over the past three years received approval by the UK court, which is seen as a favourable jurisdiction when it comes to dealing with such situations because of its well-tested legal framework. [ID : n L5E8D9B22]

PineBridge Investments, part of Hong Kong telecoms and media tycoon Richard Li’s business empire, will lose its 94 percent control and investment in Vivacom, trade name of Bulgarian Telecommunications Co (BTC), which is the third-largest mobile operator in Bulgaria.

Over 90 percent of Vivacom’s lenders approved the terms of the restructuring at hearings in August. One lender - KDB Bank Hungary - voiced its opposition at the hearing on Thursday, for arguments including that the UK court did not have the authority to rule over a Bulgarian telecoms firm.

However, the judge rejected the opposition on the grounds that the credit agreement was written under English law in 2007 when Vivacom amassed its debts, which include senior and junior ranking second-lien and mezzanine loans.

As part of the restructuring, VTB and CCB will inject 130 million euros to partially repay the company’s debt in exchange for a combined 73 percent stake, reducing its debt to around 588 million euros.

Senior lenders, which include RBS, Deutsche Bank, UBS and UniCredit, will keep 21 percent. Junior lenders will also obtain options in the company’s shares, but will write down their debt claims. ($1 = 0.7935 euros) (Editing by David Holmes)