Reuters
By Galina Sabeva
Bulgaria will find it hard to sell its state telecom monopoly BTC due to a global sector slump, analysts say, and if it does, the price will be much lower than offered for the company two years ago.
Bulgaria's government which took over in July has made the BTC sale a top priority and hopes to strike a deal by next July. BTC privatisation is pivotal for its plans to sell some 1,700 state firms this year to earn much-needed cash to cover foreign debt payments.
"It's going to be very difficult as now it's easy to sell a mobile telephone company and very difficult to sell a fixed-line company," Bob Creamer, a telecom sector analyst at Austria's Raiffeisen Zentralbank, told Reuters. "I don't expect much interest. Everyone knows telecom majors don't have money, with the exception of Vodafone, which is interested only in mobile communications. There might be some interest from financial investors, but at a very low price."
In 2000, the previous government declined to sell BTC to the consortium of Greek OTE and Dutch KPN which was offering $610 million for a 51-percent stake, which was offered in a package with a mobile licence.
The licence, the country's second for a digital mobile telephone operator, was won separately by OTE in a tender in 2000 for $135 million.
Now the government wants to sell up to 65 percent of BTC and its privatisation programme for 2002 envisages a revenue of only $100 million from the sale.
BTC's fixed-line monopoly expires in 2003. Its profit in 2001 is expected to be 180 million levs ($82 million), a 37 percent rise over the previous year.
NEW PERKS
The buyer would need to invest some 400 million euros to achieve a 80-percent digitalisation rate of the current network from 19 percent at the end of last year.
The sell-off procedure, yet to be approved by the government, is expected to be a two-stage tender open both to telecom companies and financial investors, and with an option to obtain the country's third GSM licence.
BTC NET, one of Bulgaria's leading Internet providers, fully owned by BTC, will be also offered in the BTC package.
Officials have said Bulgaria would follow advice from sale consultant Deutsche Bank not to set a minimum price for BTC in order to attract as many bidders as possible.
A Deutsche Bank source said the bank had submitted to the government a list of some 10 companies which it had contacted but were not necessarily interested in BTC.
The list included OTE, Hungary's Matav, Spain's Telefonica, as well as financial investors, the source told Reuters.
Contacted by Reuters earlier this week, MATAV and Telefonica denied any interest in BTC.
In an interview with Bulgaria's daily newspaper Trud on Wednesday, OTE's head of international investments George Skarpelis indicated there was a chance OTE might bid.
"Let us first see the terms and if they meet our expectations, maybe we will take part," the newspaper quoted Skarpelis as saying.
"It is going to be very difficult, but I think they will sell it," said Carline Doyle, analyst at Oxford Economic Forecasting. "They are so keen to privatise it. If they are offered any amount of money, they will take it, because it is so strategically important for them to get rid of it," said Doyle.
Send to Kindle
