TelSource, the strategic investor in Cesky Telecom, may have to pay a fine for not fulfilling its commitments regarding development targets regarding the state’s privatization conditions set forth in 1995 (e.g., number of installed fixed lines, etc.). The Czech Telecommunications Office has set the fine at CZK 200 mil. (USD 5 mil.), though the National Property Fund may reduce the fine.
This issue, which should not have an impact on the stock, is relatively independent of the current effort to sell the government’s remaining stake in Cesky Telecom. TelSource should inform the government this week about its position as regards a possible joint sale of TelSource/government stakes to a third party, and the finance minister has an end-of-June deadline to present Cabinet with a privatization strategy.
(Ondřej Daťka)