The National Property Fund announced yesterday that based on the privatization advisor's (CSFB/CS) recommendation the privatization committee recommends selling the state's 51% stake in Cesky Telecom via capital markets. The final decision is to be made by the Cabinet. Originally, the Cabinet was expected to make the decision in mid-November. Reuters reported yesterday that the decision may even be postponed for the beginning of 2005, citing an unnamed government official. However, we now believe that the Cabinet may even decide before mid-November. In line with our previous expectations, the option of a capital market transaction is now the most likely. The stock may face short-term weakness, but we believe that this privatization scenario is now largely priced in. CT's strong fundamentals and the successful placements of telecom companies on the European markets at minimal price discounts in the recent past suggest a successful placement of the state's stake in CT.
Also, Cesky Telecom is to announce its 9M2004 consolidated IFRS results today at 1:00pm CET. The company is holding a conference call to the results at 5:00pm CET.
Tomáš Gatěk, Patria Finance