OTE claims it is seeking funds for its Bulgaria unit
OTE Telecom, Greece’s largest company, said it was in talks to raise fresh funds to expand its wholly-owned Bulgarian Globul GSM network and denied reports it plans to sell a stake in the company. Globul, Bulgaria’s second biggest mobile phone operator, has expanded rapidly since launching last September and its subscribers numbered 150,000 by February. «Both OTE and Globul are in talks and negotiations on the financing of the company’s development with the aim of bolstering our presence in the Bulgarian mobile market,» OTE head of international investment George Skarpelis said in a statement released late on Wednesday. He denied a report in the Bulgarian daily Trud that OTE was discussing a loan-for-equity scheme with the European Bank for Reconstruction and Development (EBRD) and Dutch bank ABN AMRO NV, in which the institutions could acquire between 34 and 51 percent of Globul. «We support the growth of Globul and subsequently there is no issue regarding selling part of our stake in the company, as is dictated by the group’s strategy of strengthening development in markets in which OTE is already present,» Skarpelis said. The EBRD declined to comment, but an industry source told Reuters: «The only certain thing is that EBRD is the lead manager for a project-financing scheme on Globul’s behalf.» Globul is the trademark of Cosmo Bulgaria Mobile, the Bulgarian unit of OTE, which won a 15-year license to operate Bulgaria’s second GSM network in late 2000. The mobile phone operator’s network covers 42 percent of Bulgaria’s population. It plans to complete its network by the end of 2002, when it hopes to cover more than 80 percent of the population. OTE has invested over 500 million levs ($227.3 million) in Globul, including the $135 million it paid for the license. Another 450 million levs has been earmarked for investment by the end of 2005, Globul has said. Globul competes with Bulgaria’s two existing mobile phone operators – GSM operator Mobil Tel, recently acquired by an Austrian consortium and analogue operator Mobikom, in which Britain’s Cable & Wireless holds a 49-percent stake. Mobil Tel says its subscribers have topped 1.3 million, more than one eighth of the small Balkan country’s population. Bulgaria plans to offer a third GSM license, as an incentive to potential buyers, of up to 65 percent in telecom monopoly BTC, which the government will begin privatizing within the next two weeks. Of 10 investors thought to be considering buying the BTC stake, only OTE has indicated it might bid, but said it was awaiting further details about terms. (Reuters)
