The Euro weekly magazine reports today that the Ministry of Finance and the National Property Fund want to change the government’s privatization strategy for Cesky Telecom so that financial investors are allowed to bid (though only in consortia with strategic investors, not alone). Deputy Finance Minister Potmesil said that 15 financial investors have expressed interest in Cesky Telecom privatization. The government has also approached 12 strategic investors from the “top telecoms league,” of which a third have shown interest, according to the deputy (no names were mentioned). The authorities may find the financial investors’ interest useful as the telecom operators’ ability to make new acquisitions is typically constrained by their high level of debt. Also, this is the first time an official has indicated the level of interest in the Cesky Telecom. Although the seriousness of this interest is yet to be proved, the news is positive for Cesky Telecom stock.
Also, the deputy rejected the option of selling Eurotel and Cesky Telecom’s fixed-line business separately, though he did not rule out a scenario where a consortium wins the tender and splits the company thereafter. Furthermore, the magazine writes that the Ministry of Finance wants to complete the sale (a combined 78% stake owned by the government and TelSource is on offer) by the end of the government’s term (June 2002); this has been expected. Neutral.
(Ondrej Datka)