15 June 2004 16:01
GETTING BACK UMC STAKE UPS UKRTELECOM PRIVATIZATION VALUE - EXPERTS
KYIV. June 15 (Interfax) - The return to Ukraine's national communications operator Ukrtelecom of the 51% stake
in Ukraine Mobile Communications (UMC) will increase Ukrtelecom's value before its privatization, experts say.
Right now, 100% of the UMC stock belongs to Mobile TeleSystems, one of Russia's biggest operators.
Deputy chief of the parliamentary committee for financial and banking activity issues Serhiy Terekhin has told the
press he thinks it is a correct move by Ukraine's General Prosecutor's Office to demand via the court system
the annulment of all deals and legislation that effected the alienation of the 51% stake belonging to Ukrtelecom. It is
correct because Ukrtelecom is worth much less without UMC, he said. UMC's subscribers number more than 4.35
million.
Expert with the Information Society Institute Yaroslav Pavlovsky told the press he thinks the sale of UMC was a
strategic error by the state. "The government did have the right to sell the mobile operator, it's just that
this step significantly reduced Ukrtelecom's value," he said.
issues concerning the tender should be settled even before it is
announced. That's why a small time interval remains before
Analysis section chief at Dragon Capital Andrei Dmitrenko told the press that the General Prosecutor's Office
should have grounds to dispute the legality of the mobile operator's privatization. "However, no one today can
say what the General Prosecutor's claims and legal basis are. I think the General Prosecutor's Office will not
succeed in getting the controlling stock interest in UMC returned, although this step could significantly increase the
value of Ukrtelecom," he said.
As reported earlier, the Office is disputing the legality of the
sale of Ukrtelecom's 51% stake in UMC on grounds of the deal's non-
compliance with law passed in 2000 as concern the particulars of
Director at the International Institute for Privatization, Property Management and Investment Olexsandr Ryabchenko
told the press that the General Prosecutor's Office's interference in the sale of UMC is linked with the
desire to increase Ukrtelecom's value in the run-up to its privatization. "Mobile communications are more
promising than wire communications. The government wants to make more money on Ukrtelecom's sale," he
said.
Ryabchenko said he thinks the Ukrtelecom stock has to be sold before September 1. "After September 1, when the
presidential race will be in full swing, the time for selling will have been lost. However, all
privatization, and I think that the General Prosecutor's Office will not settle the question it raises," he
said.
privatizing the national operator.
Ukraine plans to sell 42.86% of the Ukrtelecom stock this year, after which sale the government will still retain 50%
plus one share; 7.14% of the stock had been sold at special prices to company workers.
Ukrtelecom holds a monopoly over Ukraine's communications market together with its subsidiaries, and estimates
it has a roughly 60% command over the telecommunications market. The company owns 100% of the stock in Utel and 51% in
the joint venture Infocom, a leading Internet- provider.
In November of 2002, Mobile TeleSystems (or MTS) clinched a deal on the purchase of 57.66% of UMC for $194.2 million,
including 25% from Ukrtelecom for $84.2 million and 16.33% from DeutscheTelekom (Germany) and KPN (the Netherlands) for
$55 million. The deals were wrapped up early in March of 2003.
MTS concluded an option agreement with Ukrtelecom on acquiring 26% of UMC for $87.6 million; MTS sold the option in
June of 2003. MTS and TeleDanmarkInternational (Denmark) also inked an option deal for the purchase of 16.33% of the UMC
stock for a minimum price of $55 million. It was sold in July of 2003 for $91.7 million. Thus, MTS gathered a 100% stake
in UMC, and reorganized it into a closed stock company this past April.
[Interfax] |
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