Norwegian government secures backing for Telenor stake sale

28 Jan 2015

Plans for the Norwegian minority government to reduce its stake in local telecoms group Telenor have been given backing following talks with junior partners in parliament, Reuters reports. Under the state’s plan it expects to cut its holding in Telenor Group from 54% to 34%, with the 20% stake it plans to divest said to be worth around USD6.6 billion. Such a sale would be in line with efforts by Prime Minister and Conservative party leader Erna Solberg to reduce the state’s role in the economy with a view to boosting private enterprises. With the Christian Democrat and Liberal parties, which often co-operate with the ruling centre-right coalition led by Solberg, understood to have agreed to back the stake sale plans, a statement issued by the two parties confirming the development noted: ‘The mandate for the sale in Telenor will be agreed with assurances that critical infrastructure is safeguarded.’ By retaining a third of the Telenor Group’s shares the state would still have the power to veto amendments to the company’s bylaws, effectively blocking any hostile takeovers or attempts to move Telenor’s headquarters abroad. There is, however, no timetable for the share sell-off, and indeed no further action can be taken until a motion formally allowing it is passed by parliament; the vote is currently tabled for 5 February.

As noted in TeleGeography’s GlobalComms Database, in June 2014 Norway’s Minister of Trade and Industry Monica Maeland announced that she would seek parliament’s approval to cut the state’s stake in Telenor to 34%. At the time the minister stressed that gaining parliamentary permission did not constitute a commitment to sell shares, and that the government was in no hurry to do so, while any ownership changes would depend on ‘commercial considerations, taking into account company-specific aspects as well as market conditions’. The minister did confirm, meanwhile, that any government share sale would be open to foreign companies.

Norway, Telenor Group