ECONOMY

Serbia seeks OTE nod for loan

BELGRADE (Reuters) – Serbia said yesterday it needed approval from Greece’s OTE, a 20 percent owner in the Telekom Srbija landline monopoly, for a 100-million-euro ($119.8 million) loan offered by the European Bank for Reconstruction and Development (EBRD). Capital Investments Minister Velimir Ilic said the government was due to approve the EBRD’s proposed funding at its session tomorrow. «The EBRD has offered a 25-year loan, with a two-year grace period and an interest rate amounting to 5.0 percent a year, to include the entire cost of borrowing. But we need approval from the Greek partner,» Ilic said. OTE is the sole partner to the state in the company after Serbia since December 2002. The state owns 80 percent of Telekom Srbija. «The loan would help improve the quality of landline telephony, particularly in Belgrade. In turn, the government must privatize Telekom within three years,» Ilic added. It must also ditch its monopoly in the mobile telephony sector by May 2005, to meet European Union standards. Apart from Telekom Srbija, which also includes GSM operator «MTS 064,» the state owns a 49 percent stake in mobile operator Mobtel, shared with media and telecoms tycoon Bogoljub Karic. The state has been at odds with Karic for more than a year seeking ways to cut down the size of his equity. The ownership issue is still being investigated by a special government body and the results could be unveiled next week, Ilic said. He said he hoped the final outcome would be acceptable to Karic, who had reportedly sought protection of his rights from an arbitration court in Switzerland. «Then a couple of weeks later, we will launch a tender for a financial adviser,» he added.