Entel included on state list of nationalisation targets

21 Jun 2006

The Bolivian government is to include fixed line incumbent Entel in its latest plans for the re-nationalisation of former state-run companies, according to BNamericas quoting an interview with development planning minister Carlos Villegas by state news agency ABI. The report says the state is looking to acquire a 51% stake in Entel. Any such deal would have to include the purchase of a small equity stake from current majority shareholder Telecom Italia, which holds 50% of Entel’s equity, with 48% owned by Bolivian citizens through pension fund administrators and 2% held by Entel employees. Telecom Italia acquired its indirect 50% stake in Entel in 1995, but has had numerous conflicts with the state over its running of the operator. It has indicated that it would be willing to exit the company, though it is thought to prefer a sale of its entire stake as opposed to a mere 2% or 3%. Telecom Italia struck a deal to sell its holding in Entel to Cooperativa de Telecomunicaciones de Santa Cruz Cotas in July 2005, but the deal collapsed in December after the two companies failed to agree terms.

The ABI report would appear to contradict earlier indications from the government that it had no plans to privatise Entel. Last month the state announced it was to nationalise its natural gas companies as part of plans to ensure greater state control over industry, but said there were no plans to privatise telecoms companies.