Amendment grants Telekom reprieve from cancelling shares

21 Jan 2015

Belgrade has voted in favour of an amendment to Serbia’s Law on Companies that will enable state-owned telco Telekom Srbija to continue to hold 20% of its own shares. Serbian news portal Press Online writes that under the current legislation, companies may not own more than 10% of their own shares. Firms have a three-year period to dispose of the stake, failing which the extra shares are cancelled. Telekom’s deadline for selling off its shares was 25 January 2015, the telco having purchased the 20% stake previously held by Greece’s OTE in January 2012 for EUR280 million (USD491.5 million).

During a parliamentary debate on the amendment, Tanjug cites MP Zoran Babic as saying that the company reduced its debt by RSD10.7 billion (USD95.11 million) in 2014 from RSD51.7 billion to RSD41 billion, whilst growing profits from RSD11.3 billion to RSD16 billion. Meanwhile, the operator paid out RSD10.5 billion in dividends in 2014, compared to RSD7.6 billion in 2013: ‘From a total of RSD18.1 billion, RSD13.1 billion went to the country and other small shareholders… Are we ready to give up on [these] dividends, are we ready to forget them, delete them, throw [them away]?’ Serbia’s government is planning to privatise the telco, but there is strong political resistance to the plan and previous attempts to sell the company have been unsuccessful.

Serbia, Telekom Srbija (MTS)