DT buying additional 5% OTE stake

19 Jun 2009

Greek finance minister Yannis Papathanasiou has announced that the government has agreed to exercise a put option to sell an additional 5% stake in incumbent telco OTE to Deutsche Telekom (DT). The German giant’s CEO Rene Obermann said that ‘Under last year’s agreement DT has undertaken the commitment to buy an additional 5% stake from the state, without affecting the state’s rights to the company.’ According to TeleGeography’s GlobalComms database, in May 2008 DT and the Greek government agreed a deal giving each an equal stake in OTE of 25% plus one voting share and joint management control. DT was granted pre-emptive rights over the remaining state-held shares; a put option for a 5% tranche is valid for a twelve-month period ending October 2009, and a second put option for a 10% stake will expire in 2011. In March 2009 the Finance Ministry approved the transfer of 4% equity in OTE to pension fund IKA to reduce the government’s stake to 21%.

Papathanasiou revealed that the 5% slice of OTE will cost DT EUR674 million (USD940 million), or EUR385.5 million more than the shares’ current market price. The government has earmarked the proceeds from the sale for reducing national debt.

Greece, Cosmote, Deutsche Telekom (DT)