ECONOMY

Albania offers phone, oil and insurance firms to foreigners

TIRANA (Reuters) – Albania will start inviting strategic investors in August to buy controlling stakes in its phone, oil and insurance companies, Economy Minister Anastas Angjeli said in an interview on Friday. Tirana plans to promote the sale of Albtelecom, oil-refining firm ARMO and insurer INSIG in campaigns from August to October, featuring investor conferences in Europe and the United States. Having successfully sold its biggest bank to Austria’s Raiffeisen last year for $126 million, Albania is seeking more capital for both its telecom and insurance firms as competition stings these sectors. «These are very important steps in the process of the privatization of the Albanian economy because the private sector makes up the basis of our sustainable development and accounts for more than 70 percent of GDP,» Angjeli told Reuters. The government has declined to say how much it is targeting in the privatization of the key state-owned companies. One of Europe’s poorest countries with a GDP per capita of $1,400, Albania has seen a mobile phone boom resulting in more than 1 million subscribers, dwarfing fixed-line firm Albtelecom’s share of the market. It has 250,000 subscribers. The Albanian government twice postponed the sale of Albtelecom during the world technology downturn at the start of the decade and due to Albtelecom’s own troubles – now over – concerning debt and legal problems with a US partner. «Our consultants tell us the market is normal in this period. We consider this helpful and the fixed-phone market is adequate to offer Albtelecom for sale,» Angjeli added. Albtelecom, which had a 1.067 billion leks ($10.51 million) gross profit in the first six months of 2004, will offer between 51 and 76 percent of its shares for sale. Albtelecom has a 100 percent digital network with fiberoptic international connections. To sweeten the Albtelecom offer, its sale package will include its newly licensed GSM-standard phone arm, Eagle Mobile. The government says Eagle will launch operations soon. The market is currently dominated by Albanian Mobile Communications, owned by Greece’s CosmOTE and Vodafone Albania, a partnership of Greece’s Vodafone Panafon and the UK group Vodafone. The government is also offering 51 percent of oil-refining group ARMO and 60 percent of insurer INSIG. The European Bank for Reconstruction and Development and the World Bank’s commercial lending arm International Finance Corporation have already bought 40 percent of INSIG, which has been surpassed as market leader by a private insurer. «We are confident (of sale prospects) because the experience we have gained in previous sales in terms of strategy, laws and transparency,» Angjeli said.