Deutsche Telekom’s Greek unit OTE said on Tuesday it was in talks to sell its minority stake in Serbia’s former monopoly Telekom Srbija back to the country’s government.
If completed, the sale of OTE’s 20 percent stake could help the Greek company raise cash to cut its debt and invest in new networks as it battles a severe recession in its home market.
Gaining full control over Telekom Srbija would also make it easier for Belgrade to push ahead with long-delayed plans to find a new investor for the company.
“OTE … is in talks with Telekom Srbija with the aim of disposing its 20 percent stake in the company,» OTE said in a filing to the Athens bourse.
“As negotiations are ongoing, OTE can’t comment either on their outcome, or on the timetable,» it added.
OTE acquired its Telekom Srbija holding in 1997 but it has not been able to do much with the stake because Serbia balked for years at giving up management control or reducing further its 80 percent stake in the company.
By the time Serbia offered to sell a majority stake in Telekom Srbija in late 2010, OTE was out of the race, hampered by an economic crisis at home. Deutsche Telekom, which owns 40 percent of OTE and has so far lost almost 1 billion euros ($1.34 billion) on its investment, is pushing the company to cut costs and raise cash.
OTE’s minority stake complicates Serbia’s search for an investor.
In May, Belgrade rejected a 1.1 billion euro offer by Austria’s Telekom Austria to buy a 51 percent stake in the company. Serbia had asked potential buyers to pay at least 1.4 billion euros.
OTE had said as early as December 2010 that it was ready to sell its Serbia stake to any new investor. It said it could use the proceeds to either reduce debt or invest in new fibre networks as it tries to expand into high-tech services to stem a client flight from traditional telephony. [Reuters]