Government officials are quoted in MFDnes as suggesting that the issue of acquisition of the remaining 49% stake in Eurotel’s is complicating Cesky Telecom privatization. Officials from the Ministry of Finance, the Ministry of Transport and the National Property Fund are reportedly questioning whether the planned purchase of a 49% stake in Eurotel by Cesky Telecom and the related increase in Cesky Telecom’s debt will hinder or benefit Cesky Telecom privatization. Deputy Finance Ministr Tomas Potmesil suggested that both options — selling Cesky Telecom with or without the 49% stake in Eurotel — are still possible, though he says that the former is preferred. Eurotel’s acquisition will be concluded at a fair price (which has been agreed at CZK 57 bil.), in our opinion, and an attempt to reverse it would be negative for Cesky Telecom. However, we consider it very unlikely that the government (as the 51% shareholder) would block the acquisition, and do not expect this report to have an impact on the stock.
Also, Finance Minister Jiri Rusnok said at a press conference on Friday that the government will likely receive proceeds from Cesky Telecom’s privatization in the first quarter of next year, not in 2001. Given that the official deadline for the FinMin to recommend a tender winner to the Cabinet by October is widely considered overly ambitious and unrealistic, such a statement confirms such expectations. Slightly-negative-to-neutral for the stock.
(Ondrej Datka)