Citigroup to advise Romtelecom

US bank Citigroup has been selected to advise RomTelecom on its options for Cosmorom, the company’s mobile telephony division, said Dan Pazara, RomTelecom’s communications director.

“The RomTelecom Board has appointed Citigroup to analyse the letters of intent and the proposals received by the Ministry of Communications concerning Cosmorom. The US-based bank will come up with a report on these issues within 90 days,” Pazara added. Citigroup is one of the world’s largest financial service providers. Among others, the US group advises the governmental institutions and companies on acquisitions, mergers, restructuring, lending and debts.

Set up in 1999, the mobile phone operator Cosmorom started operating in early 2000. Cosmorom reported operating revenues worth 2.3 million euros in the third quarter last year, whereas losses amounted to 7.4 million euros. One of the operator’s major problems is a debt that exceeds $100 million (interest rates not included), to its main equipment supplier, Greek company Intracom. Cosmorom’s capital amounts to 3,597.5 billion ROL.

Sources on the banking market said last month that RomTelecom was planning to get a foreign loan worth 200 million euros to finance investments in order to develop the telecommunication infrastructure. According to the quoted sources, the company is allegedly negotiating the terms and conditions of the loan with five big financial groups: Citigroup, Dresdner Kleinwort, J.P. Morgan Chase, HVB and Alpha Bank Greece. However, RomTelecom general manager James Hubley would not comment on the information.