Sale of Ukrtelecom almost done and dusted

14 Feb 2011

Ukraine’s State Property Fund issued a statement on Friday in which it confirmed that it has made a formal proposal to Epic Services Ukraine (ESU), a subsidiary of Austrian investment fund Epic, to acquire a 92.79% stake in national telecoms operator Ukrtelecom. The SPF has completed a review of an evaluation report from a third-party consulting firm, Ostrov, which established that the sale process and sole bid from ESU ‘fully complies with the regulatory assessment of state property.’ Based on this assessment, the asking price for the 92.79% stake is set at UAH10.5751 billion (USD1.315 billion). The auction starting price was UAH10.5 billion. On Saturday, managing partner at Epic, Peter Goldscheider, told the UK’s Financial Times that the Austrian firm will accept the SPF’s offer, and that he hopes to close the acquisition in March pending talks with banks to finance the purchase. Chairman of the board of Ukrtelecom George Dzekon said in an interview – quoted today by local newspaper Delo.ua – that he considered the starting price and conditions of privatisation to be fair.

As reported at the time by CommsUpdate, at the end of last year the SPF received the sole bid for the government’s entire 92.79% stake in incumbent telco Ukrtelecom from ESU, which met the minimum price plus a nominal UAH10. The state tender commission subsequently approved ESU’s development plan for Ukrtelecom involving investment of UAH450 million over five years. An independent evaluation of the price followed, due to the lack of competitive bids. ESU has indicated that it is committed to developing the telco’s fixed and broadband network over a four-to-five year period before putting the company up for sale again, whilst there is the likelihood that Ukrtelecom’s 3G mobile division might be sold off separately.

Ukraine, Ukrtelecom (incl. TriMob)