Government to cash in on RomTelecom; OTE asked to formulate buyout offer

29 Nov 2010

The Romanian government has confirmed its intention to sell off its remaining 45.99% stake in national operator RomTelecom, Dow Jones reports. Greek majority shareholder OTE – which holds the other 54.01% of RomTelecom – has been asked to present a buyout offer by the end of the year. However, the news report goes on to suggest that if OTE is unwilling to match the government’s asking price, Bucharest will consider listing the stake on the local bourse instead. A price-tag of EUR1 billion (USD1.32 billion) has been mooted by government insiders.

Valerian Vreme of the Ministry of Communications and Information Technology (MCTI) told Mediafax: ‘The Ministry will ponder the current situation in the market and it won’t sell its stake at just any price. We take the matter seriously’. In 1998, OTE paid the Romanian government USD675 million for a 35% stake in RomTelecom, with an agreement for the Greek-based company to acquire an additional 16% share at a later date. The Greek company went on to become the majority shareholder in the Romanian operator in 2003, after it paid a further USD273 million. Deutsche Telekom owns 30% of OTE.