Slovak govt starts talks with Deutsche Telekom on sale of 49% of Slovak Telekom

By bne IntelliNews July 19, 2013

The Slovak government has started a series of talks with Deutsche Telekom regarding the potential sale of its 49% stake in Slovak Telekom, in which the German telecoms group owns the remaining 51%, Hospodarske Noviny business daily reported.

Deutsche Telekom, which bought the 51% stake in the former Slovak fixed-line monopoly from the state in 2000 for EUR 1bn, has a buy option for the government’s 49% holding.

Economy ministry spokesman Stanislav Jurikovic has confirmed to the daily that one meeting has been already held with Deutsche Telekom, but the German company has not indicated whether it would exercise its buy option or not. The next meeting is scheduled for the autumn.

The Slovak cabinet approved in March a document that mandated the economy ministry to initiate discussions with related parties regarding the different options for the sale of the state's stake in Slovak Telekom. The government decided to sell the stake as it has little control over the company. Another reason is that the cabinet needs to find money to buy out the country's two private health insurers. It expects to get about EUR 600mn to EUR 800mn from the sale.

Slovak Telekom, which employs some 4,200 people, posted a revenue of EUR 837mn last year, down 6.7% y/y due to significant mobile termination rate cuts, continuing strong roaming regulation and tightened competition on the mobile markets, which lead to price cuts. Its EBITDA fell 9.3% to EUR 352mn.

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