MTEL: Macedonian government may sell its remaining 45% stake in MakTel

The Macedonian government is preparing to sell a 45.1% stake in Makedonski Telekommunikacii AD (MakTel) for approximately Euro 275 million, leaving only 2% plus a golden share in state ownership. The state's share equals to some 43 million shares, and MakTel is scheduled to be listed on the stock exhange between June 5 and 9. We see the news as neutral for MTEL, which holds the majority ownership of MakTel. The original terms of the sale preclude privately owned companies and potential rivals to MakTel from acquiring a stake of 10% or more, thus protecting MTEL's position in the company, and the Macedonian telecom market in general. The listing will also provide MTEL the opportunity to increase its stake in MakTel whenever it is economically sensible. We maintain our Buy recommendation on MTEL based on its solid fundamentals and attractive valuation.