Privatisation of Telekom Slovenije collapses

By bne IntelliNews August 5, 2015

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The privatisation of Telekom Slovenije has collapsed after UK-based private equity fund Cinven withdrew its bid for the 72.75% stake, saying that recent developments made the deal unviable.

In a letter to Slovenian Sovereign Holding (SDH), which is in charge of Telekom Slovenije’s privatisation, which was announced on August 4, Cinven said that several important developments which have taken place since its last bid was made in June made the transaction no longer economically viable.

One of the crucial reasons for Cinven withdrawing from the negotiations, according to the letter, is the highly uncertain business environment in which Telekom Slovenije operates, highlighted by the complex nature of the political landscape in Slovenia together with the strong response from the public in regards to the sales process. 

According to SDH, Cinven's decision was also made based on recent measures taken by the telecommunication market regulator AKOS that would make the regulatory environment less investor-friendly for Telekom Slovenije, though it didn't go into further details.

Cinven's decision was also influenced by the recent modifications in the EU-wide regulations in regards to international roaming, and the changes in the operation of the telecom that would have a negative impact on the company’s performance results.

Because of the tightened conditions in the financial markets, the costs of financing the deal had also increased, which had a negative effect on the entire sale process, SDH stated.

Since Cinven was the only bidder for the purchase of Telekom Slovenije, SDH has officially closed the process for the sale of the state's share in the company.

Telekom Slovenije has been for sale since 2013 and is Slovenia’s most valuable company.

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