Ljubljana extends Telekom Slovenije bidding deadline as opposition to privatisation grows

By bne IntelliNews February 9, 2015

Clare Nuttall in Bucharest -

 

Slovenia has reportedly extended the bidding deadline in the tender for the privatisation of Telekom Slovenije, the most valuable company up for sale under the current privatisation programme. The latest delay comes amid tensions within the Slovenian ruling coalition over the programme.

On February 7, around 3,000 people took to the streets of Ljubljana to protest against planned privatisations. Demonstrators chanted “privatisation is theft” and warned that selling off the 15 major companies earmarked for privatisation risked pushing up unemployment.

The demonstration was sparked by the imminent sale of Telekom Slovenije. The government is reportedly eyeing €1.6bn from the sale of its 73% stake in the company.

However, its inclusion on the list of companies up for privatisation, adopted in 2013, has also been the subject of a lengthy debate within Slovenia. In the run-up to the July 2014 snap elections, privatisation was the single most important issue, with politicians of all political orientations courting public support by speaking out against privatisation plans. Miro Cerar, the political outsider who swept to power, said he opposed plans to privatise the telecoms operator. Instead, following the election, his government announced it would proceed with the privatisation programme adopted under former Prime Minister Alenka Bratusek.

Today, tensions within the ruling coalition, which comprises the Party of Miro Cerar, the Social Democratic party and the DeSUS Pensioners party, over the issue are rumoured to be growing. Meanwhile, the opposition United Left said on February 4 that it will propose legislation to give both parliament and employees of state-owned companies greater influence over privatisations, the Slovenia Times reported.

The bidding deadline to acquire Telekom Slovenjie has now been moved back from the beginning of February to the end of March, regional news wire SEEbiz reported on February 9. Slovenian Sovereign Holding (SDH), which manages state capital investments and is in charge of the privatisation, has made no comment on the reports. However, according to SEEbiz, the holding company wants to give more time to potential bidders.

Deutsche Telekom and several buyout firms from the US and Europe are reportedly in the race to buy the government's 73% stake in the company. In January, UK-based private equity firm Cinven became the latest potential bidder to confirm its interest in the ongoing privatisation. Cinven representatives said they believe Telekom Slovenije has excellent infrastructure, and could be turned into a Slovenian champion, hinting that annual investments in the company could amount to €100mn.

Telekom Slovenije's consolidated net profit fell 19% y/y to €37.7mn in the first nine months of 2014 as revenues dropped 2% y/y to €574mn. In mid-November, it sold its stake in Gibtelecom Limited to the government of Gibraltar for €47.7mn.

In 2015, Telekom Slovenije forecasts that its consolidated net profit will rise to €66mn. EBITDA is expected to reach €198mn thanks to the sale of the 50% stake in Gibtelecom and the merger of its Macedonian unit, ONE, with the Skopje-based subsidiary of Telekom Austria Group, VIP. The Slovenian group has said its earmarked investments for 2015 total €107mn.

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