Slovakia has signed a contract with Citigroup and JP Morgan to sell its 49% stake in Slovak Telecom after Deutsche Telekom passed on the opportunity to increase its 51% holding.
On Monday The National Property Fund of the Slovak Republic agreed terms…
Slovakia has signed a contract with Citigroup and JP Morgan to sell its 49% stake in Slovak Telecom after Deutsche Telekom passed on the opportunity to increase its 51% holding.
On Monday The National Property Fund of the Slovak Republic agreed terms with the investment banks which allows them to sell the shares over the next year.
The banks will pursue a dual-track process. An IPO is the state’s preferred option, but it has said the final decision will depend on market conditions.
The government has recently amended privatisation laws so that it can list its shares in the incumbent. Previously only direct sales and public auctions were permissible.
The government signed a memorandum of understanding with the incumbent’s majority shareholder, Deutsche Telekom, on the planned sale earlier this year. Deutsche Telekom still has a right of first refusal on the government’s stake. The two parties signed a memorandum of understanding earlier this year to set out a path for the government to exit the business.
The finance ministry anticipates that the sale will raise the equivalent of 1.3% of GDP in 2015, according to its draft budget estimates for 2015 to 2017. The ministry estimates the nominal GDP in 2015 will total €77.8bn (US$106.76bn), meaning it aims to reap about €1.01bn (US$1.29bn) from the sale.
