The National Property Fund deputy chairman Pavel Kuta said the sale contract of the 51.1% stake in Cesky Telecom to Telefonica could be signed on Tuesday, April 12, but that the date has not been confirmed. The signing of the contract is now independent of any political issues.
Separately, according to a source close to the privatization, this year’s dividends will most probably be decided by Telefonica, and not by the state. This condition will be part of the sale contract, which is being drafted. Telefonica is expected to take control of CT by mid-2005 while the AGM is taking place on June 23. According to earlier news Telefonica is planning to finance the transaction through debt and consequently to use dividends from Cesky Telecom and its own cash flow to repay it. Under the approved dividend policy of paying up to 70% of the consolidated net profit, the CT dividend could amount to CZK 12 / share. However, the company could pay as much as CZK 28 / share according to Czech Accounting Standards. We expect any decision on dividends to be made after the obligatory buyout offer and the dividends to be at the higher end of the potential dividend range (CZK 12 – 28 / share).