The privatisation of Telekom Slovenije will be suspended until the incoming government endorses the process – the second postponement in two months.
A spokesperson for Slovenian Sovereign Holding (SDH), which is coordinating the process, said it has…
The privatisation of Telekom Slovenije will be suspended until the incoming government endorses the process – the second postponement in two months.
A spokesperson for Slovenian Sovereign Holding (SDH), which is coordinating the process, said it has decided the new government needs to make “a clear standpoint” on the privatisation of the incumbent telco before the process is resumed.
“In accordance with international practice, unambiguous support on the part of the government and its representatives is required for the successful implementation and conclusion of comparable privatisation processes,” the spokesperson noted.
Local publication Finance recently cited a source as saying potential buyers are waiting for the new government, when finally in power, to clearly indicate whether or not the privatisation will proceed as planned.
Political newcomer Miro Cerar, whose centre-left SMC party won the general election in July, will come into power after parliament approves his cabinet, expected to happen within a fortnight. SMC is set to sign a coalition agreement with pensioners’ party Deus and the Social Democrats later in the week.
Cerar has said he will review the planned sales of strategically-important assets, such as the incumbent telco. While he has spoken out against privatisations in general, he has said processes deemed too late to cancel will go ahead.
According to local media, the coalition is considering splitting Telekom Slovenije into infrastructure and services divisions prior to a sale so the government can retain control of the infrastructure.
Selling the telco without the infrastructure would be much more difficult and command a much lower price tag, local media have commented.
Telekom Slovenije has declined to comment on the matter.
The outgoing government had planned to privatise Telekom Slovenije by the end of the year, and hired Citi as an adviser. But it briefly suspended the process, along with 14 other planned privatisations, pending the formation of the new government.
SDH reportedly received numerous bids for Telekom Slovenije earlier in the year from both strategic and financial players. The strategic bidders included Germany’s Deutsche Telekom, Russia’s MTS and Turkey’s Turkcell, but the highest offers came from private equity firms Apax, Bain Capital and Providence, according to a Finance report in July referring to unnamed sources.
Raiffeisen Bank analyst Jure Vrhunec said the new government will need to strike a balance between what it wants in terms of privatisation and commitments already made to the European Union to resolve its economic troubles. In his view, Cerar is likely to soften his stance against privatisations when he starts international talks as Prime Minister.
“The fact is that rumours about the division of the company and delay in the process are not good and, in my opinion, the consequences are already there.”
He believes this is especially true at state level, saying Slovenia is losing credibility among the international community.
“This is what the future Prime Minister should not allow and he must restore the reputation of Slovenia, especially if we want to sell some more companies in the future, which is essential to reduce the country’s level of indebtedness.”
The state controls 72.38% of shares in Telekom Slovenije, which has a market capitalisation on the Ljubljana bourse of €855.49m (US$1.12bn).
Slovenia’s privatisation programme forms part of its plan to stabilise its economy and finances after narrowly avoiding having to seek an international bailout last year.