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Greece approaches Telekom on OTE sale

The Local · 26 May 2011, 16:52

Published: 26 May 2011 16:52 GMT+02:00

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"Finance Minister George Papaconstantinou today sent a letter to the board of Deutsche Telekom to begin the procedure," the minister's office said. It added that the move followed "a decision by the cabinet on the further privatisation of OTE."

The cash-strapped Greek government this week said it will reduce its 16-percent stake in OTE by next month amid plans to raise €50 billion ($70 billion) from state asset sales to reduce the country's huge debt.

The semi-state Athens News Agency (ANA) reported Thursday that tenders on a host of other state properties for full or partial sale - including the ports of Piraeus and Thessaloniki and Hellenic Postbank, one of the country's best-capitalised lenders -- would be launched in coming months.

Germany's Deutsche Telekom currently controls 30 percent of OTE, the largest telecom operator in the Balkans that employs some 30,000 people in Albania, Bulgaria, Romania and Serbia.

The government is holding crunch talks with the EU, the International Monetary Fund and the European Central Bank on a privatisation programme and economic reforms whose outcome will determine Greece's continued solvency. Athens last year was granted a €110-billion loan from the three organisations and has warned it will go bankrupt without a €12-billion instalment due this month.

The government said it would activate a "put option" - a contract to sell an asset by a specific date - on a 10-percent stake in OTE and would also consider selling the remaining six percent at an unspecified date.

Story continues below…

OTE this month reported a net profit of €30.2 million ($42.5 million) in the first quarter of the year, a fall of 54.1 percent from 2010. In February, OTE announced cost cuts worth some €32 million but managed to raise €500 million in a three-year bond sale two months later.


The Local (news@thelocal.de)

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