The Colombian government’s plan to offload its 32.5% stake in Telefonica Colombia (Movistar) has taken another step forward, with the Ministry of Finance issuing Decree 1215 on 13 July, setting the price of its total shareholding at COP2.3 trillion (USD800 million). A total of 1.108 billion shares will be sold via a two-step public offering, with the price set at COP2,075 per share. In the first instance, shares will be made available to employees, retirees, unions and pension funds affiliated to the telco, while the second stage of the process will see shares sold to the general public. However, the Ministry of Finance has warned that the share sale could take up to a year to come to fruition, and the government reserves the right to suspend or terminate the process at any time.
TeleGeography notes that the stake sale was prompted a COP4.8 trillion joint fine in July 2017, which was levelled at Movistar – and rival Claro – for breaching the terms of their original 1994 licences. The two mobile operators were required to return all wireless network infrastructure to the state after a ten-year period (subsequently extended for a further ten years), but failed to do so. As the co-owner of the cellco, the government was duly obliged to participate in a capital increase of approximately EUR1.37 billion (USD1.64 billion) to pre-pay all commitments in relation to PARAPAT, the consortium that owns the telecoms assets and manages the pension funds of the former companies that resulted in the creation of legacy operator Colombia Telecomunicaciones (ColTel, now Telefonica Colombia).