M.Frankl, the deputy IT minister, indicated yesterday that Cesky Telecom might pay a dividend, but not a large one, if the 100% acquisition of Eurotel is not completed (Cesky Telecom currently owns a 51% stake in the mobile operator). The statement, while vague, is not surprising; we believe that Cesky Telecom might pay a dividend even in the event of the minority-stake acquisition; while the dividend’s size would be subject to the price paid for the 49% stake in Eurotel, we believe that such a dividend would not exceed CZK 10 per share.
In the event the minority stake is not acquired, an extraordinary dividend, of up to CZK 70 per share, could be forthcoming, we estimate (e.g., Cesky Telecom held CZK 18 bil. of consolidated cash and equivalents at the end of March, of which approx. CZK 4 bil, comes from Eurotel’s balance sheet).
Separately, the Cabinet should discuss "the state ownership in Cesky Telecom" during a regular meeting today. We do not expect any surprising news to come out of the meeting, as it is widely believed that Cesky Telecom’s privatization will not commence before year-end 2004.
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