RomTelecom stake listed on BSE in 2004

A stake in telecommunications operator RomTelecom will be listed on the Bucharest Stock Exchange in mid 2004, OTE International chairman George Skarpelis said on Friday, without providing details as to the exact number of shares to become available on the capital market, though.
“The provisions of the agreement we hope to sign next (i.e. this) week, stipulate the Romanian State may sell its stake in RomTelecom on the Stock Exchange as of 2004,” Skarpelis added.
More details about OTE’s plans for RomTelecom would be provided as soon as the contract is signed, Skarpelis said, referring to the company’s strategy and the new management team, as well as to mobile telephony operator Cosmorom.
“We are not ruling out the possibility of RomTelecom being run by a general manager from outside OTE. At the same time, the company management will include people who have an international telecommunications experience, who are capable of running a company on a liberalised market, such as the one in Romania,” Skarpelis said.
At the same time, OTE International chairman estimated RomTelecom could turn a profit in two years, provided the annual EBITDA growth rate of the entire group should remain at about 42%, Cosmorom’s operating costs not included.
As for the mobile telephony operator, the OTE Group representative said it would account for a second stage of the investments the Greek company had scheduled for the Romanian market.
“Mobile telephony penetration in Romania reaches 20% – 22%, compared with 50% – 60% in the European Union, which shows the domestic market’s potential is yet insufficiently exploited. The investments in Cosmorom will go on, but we are also considering partnerships with other operators to develop it,” Skarpelis said.
The contract for continuing RomTelecom’s privatisation could be endorsed by the Government on Thursday, January 30, if included on its agenda, and signed by the two parties involved soon afterwards.
The law on continuing privatisation of the national fixed telephony operator was published in the Official Gazette early last week. The normative act specified OTE would subscribe a $242.62 million interest. The deal will be conducted by a cash inflow of $145 million, with the rest of the amount covered by converting OTE’s receivables over RomTelecom worth 55 million euros and $42.6 million into shares.
OTE will also buy a $30.99 million stake, which will raise the transaction to approximately $273 million. This operation, calculated at $31.17/share will enable OTE Telecom to hold 54.01% in the capital of the Romanian fixed telephony operator.
The agreement also stipulates that the Greek party shall deposit $250 million in RomTelecom’s accounts in three to six months, money obtained from an OTE-secured banking loan.
OTE bought 35% into RomTelecom in 1998 and got usufruct of another 16%, with the deal concluded with the Romanian State back then reaching $675 million.