Slovenia Telekom sale on hold, awaits new government approval (updated)

Telekom Slovenije, D.d

02/09/2014 15:43

* New govt to take over in the middle of Sept 
    * Telekom has market cap of 840 mln euros 
 
 (Updates with the sale on hold, SDH quote) 
    By Marja Novak 
    LJUBLJANA, Sept 2 (Reuters) - The privatisation of 
Slovenia's largest telecom operator Telekom  TLSG.LJ  has been 
put on hold, pending approval by the incoming centre-left 
government, government investment firm SDH told Reuters on 
Tuesday. 
    SDH, which is coordinating the Telekom sale, confirmed a  
report in daily newspaper Finance that the sale could be 
delayed. Privatisation is seen as a key element in Slovenia's 
drive to consolidate public finances after it narrowly avoided 
an international bailout for its banks in December.  
    "In line with opinions of legal and financial advisers, the 
SDH believes that a clear standpoint and support from the new 
government is needed before the sale of Telekom can continue," 
SDH said in a statement prepared for Reuters. 
    Telekom is the largest of 15 firms the outgoing government 
slated for privatisation last year. Only two have been sold so 
far. Telekom's sale process started in April and the outgoing 
government had hoped to finalise it by the end of the year. 
    But law professor Miro Cerar, who became prime minister last 
week after his centre-left Party of Miro Cerar (SMC) won a snap 
general election in July, has been sending conflicting signals 
about the sale of state assets. 
    He said he was against selling strategically important firms 
like Telekom  ID:nL5N0QV3ES . But he also said he would not stop 
the privatisation if that would hurt Slovenia's credibility. 
    Cerar will take over after parliament approves his cabinet, 
which is expected in the middle of September. 
    His SMC party is due to sign a coalition agreement with 
pensioners' party Desus and the centre-left Social Democrats 
(SD) later this week, both of which are reluctant about 
privatisation in general.  
    According to local media, a draft coalition agreement 
includes the possibility of separating Telekom's services and 
infrastructure before the sale, with the infrastructure arm 
remaining in state hands.  
    Analysts say that would halve the price of Telekom, which 
has a market capitalisation of 840 billion euros ($1.10 
trillion) and was expected to be sold for about one billion 
euros. 
   The government and state-owned firms are selling a total of 
72.75 percent of Telekom, with the rest of the company already 
in the hands of private investors. 
    "I hope the government will not divide Telekom as in that 
case it will probably not find a buyer at all. However, I expect 
that Telekom will be sold as a whole company, also due to the 
pressure from Brussels," said Jure Vrhunec, a trader at 
Raiffeisen Bank.  
    Sources close to the deal told Reuters in July telecom firms 
Deutsche Telekom  DTEGn.DE  and Turkcell  TCELL.IS  and 
investment companies CVC  CVC.UL , Cinven  CINV.UL , Providence 
and Apax could be interested in purchasing Telekom. 
    Telekom shares closed 1.83 percent lower at 128.50 euros on 
Tuesday while the blue-chip SBI index  .SBITOP  gained 0.23 
percent. 
(1 US dollar = 0.7623 euro) 
 
 (Reporting by Marja Novak; Editing by Zoran Radosavljevic and) 
 ((Marja.Novak@thomsonreuters.com; +386-8-205-6369; Reuters 
Messaging: marja.novak.thomsonreuters.com@reuters.net)) 
 
Keywords: TELEKOM PRIVATISATION/