Romania ties OTE up

BUCHAREST (Reuters) – Romania said on Wednesday that Greek telecom firm OTE would need state approval to get major credits or to restructure telephone operator Romtelecom under a $243-million deal for a majority stake in the company. Under an accord agreed in principle with OTE in November, the Romanian State would retain a «series of special rights» for as long as the company is not listed on the bourse, the Communications Ministry said in a statement detailing elements of the deal. Romania and OTE have been locked in talks over the past year about how to inject funds into cash-strapped Romtelecom. On Tuesday, a senior Communications Ministry official said the two sides had almost completed talks on the long-awaited deal and were expected to sign it next week. The $243-million accord would boost OTE’s stake in Romtelecom, its biggest investment abroad, to 54 percent from the present 35 percent. Under the November agreement, OTE would need state endorsement for a reorganization or voluntary liquidation of Romtelecom, for credits exceeding $50 million guaranteed with assets and not included in the initial business plan as well as for sales of assets worth more than $20 million, the ministry statement said. The State will also have the right to appoint two representatives to Romtelecom’s board, it added. The accord replaces a more restrictive «golden share» held by the State under the terms of a sell-off of Romtelecom in 1997, when OTE paid $675 million for a 35-percent stake. The golden share gave the State veto rights on mergers, asset mortgaging or moves seen as affecting Romania’s national interest. Last month, a senior OTE executive said OTE planned to cut some 4,000 jobs at Romtelecom, part of a restructuring program which also includes tariff reductions.