BTC sell-off terms OK’d by Bulgarian Parliament
SOFIA – Bulgaria’s Parliament yesterday approved outline terms for the sale of state-owned telecoms monopoly BTC, paving the way for a deal crucial for bringing in much-needed cash in one of the poorest EU aspirants. Bulgaria’s Cabinet wants at least $100 million from the sale, although it has set no minimum price. This reflects a downturn in sector fortunes since 2000 when a previous Cabinet rejected a $610 million bid for a 51 percent stake in BTC and a mobile communications license. The new Cabinet has attached top priority to the sale, which is now expected to start within two weeks, and is this year’s largest contribution to plans to close the country’s widening current account gap by selling off 1,600 state-owned firms. The Balkan state will offer up to a 65 percent stake in BTC in a two-stage tender open to both telecoms firms and financial investors. The selloff strategy, on which Deutsche Bank advised, includes an option for the winner to take the country’s third GSM network license, a move set to be an additional incentive to potential buyers. The state will retain a golden share in BTC after the sale to take part in key decisions on its development. Sector slump Government officials have said the BTC sale is expected to be launched within two weeks and be completed in four months. However, analysts say the sale of BTC, whose fixed-line monopoly expires in 2003, will be difficult given the current global telecom sector slowdown. Other obstacles, analysts say, could be BTC’s low rate of digitalization and Bulgaria’s decision to retain a golden share, which could put off potential investors eying a majority stake. Transport and Communications Minister Plamen Petrov said on Wednesday that 13 companies might be interested. So far, Greece’s OTE Telecoms has indicated it might bid, but said it was waiting to see the exact terms. A source from British-based Charlemagne Capital told Reuters on Wednesday the fund was considering options to bid for BTC in a consortium with a telecom company. «If we get three offers that will be a success,» Deputy Prime Minister Nikolai Vassilev told Reuters on Wednesday. «Let’s us not forget that the previous time, we received only one offer,» he said, referring to a previous attempt to privatize BTC in 2000, when a consortium of OTE and Dutch KPN was the single bidder. The previous government declined to sell BTC to the OTE/KPN consortium, despite the group’s bid of $610 million for a 51-percent stake offered in a package with a GSM license, a sum that dwarfs current expectations for the sale. The government did manage to sell the GSM license, the country’s second, to OTE in a separate $135 million tender later that year.
