Ukraine may cut its starting price for the second time this year for the privatisation of telecom service provider Ukrtelekom, as the country's communication minister suggesting asking no less than USD 1.5 bn, while the original asking price was USD 7 bn. The telco is a potential acquisition target for Hungary's Magyar Telekom, as well.
“Two conditions have to be set in this privatisation at a time of a crisis. Firstly, the price must be set in dollars and secondly, the minimum price must be no less than USD 1.5 billion dollars," Bloomberg cited Transport and Communication Minister Yosip Vinsky as saying in statement on Thursday.
Vinsky would like to see Ukrtelekom, the dominant fixed-line operator which moved into the mobile business in 2007, sold to a “'serious European company". The operator, along with the Odessa Port chemical plant, will need to be put on the sell-off list next year.
This has been about the zillionth “promise" by the Ukrainian government to privatise Ukrtelekom. The issue has been on the table for over a decade therefore the minister's statements in this regard should be granted the same significance as the cabinet has been giving to the sell-off.
The USD 1.5 bn minimum asking price comes as the second “discount" this year. Up until February 2008 the government wanted USD 7 bn for the company but in April they would have settled for USD 2.4 bn already.
Chipping away at the asking price means the cabinet may be taking Ukrtelekom's privatisation more seriously. Deputy Prime Minister Oleksandr Turchynov announced in early November that a number of investors, including Japanese companies, were interested in buying Ukrtelekom.
The Ukrainian carrier is a potential acquisition target for Hungary's Magyar Telekom, as well. This may be the reason MTel decided not to put in a bid for a 10% stake in Telekom Slovenije by the 3 Dec deadline, because it has a bigger fish to fry.
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