ECONOMY

Sofia sets terms for BTC sale

SOFIA (Reuters) – Bulgaria said on Friday it would set preliminary conditions for potential bidders for its state telecom firm BTC and would retain a golden share after the sale. Bulgaria’s government, which took over in July, has made the BTC sale a top priority. Its privatization is pivotal to its plans to sell many state firms this year in order to earn much-needed cash to cover foreign debt payments. Transport Minister Plamen Petrov, speaking to reporters after submitting the BTC sell-off plan to the government, said the privatization process would be launched in the coming weeks with a view to a deal being completed in four months. However, analysts have said the government will find it hard to sell BTC in the current industry climate. Bulgaria plans to offer for sale up to 65 percent of BTC in a two-stage competition open to both telecom firms and financial investors without setting a minimum price. There will be an option on the country’s third GSM cellphone network license. «There will be preliminary requirements for potential investors, which will be linked to the revenue and the number of subscribers for telecom companies and to the assets for financial investors,» Petrov said, but did not give details. Asked whether the state would keep a golden share in BTC after its privatization, he said: «It will be a golden share or a special note in the company statutes, but we will make sure that the main decisions would not be taken without the participation of the state and will not be against the interests of the state and the customers.» The strategy for BTC’s sale, advised on by Deutsche Bank, is yet to be approved by the Cabinet and Parliament. A Deutsche Bank source has said the bank had submitted to the Cabinet a list of some 10 companies which might be interested, which included Greek OTE, Hungary’s Matav, Spain’s Telefonica, and financial investors. Petrov said he expected only half of those 10 to bid and that some of the financial investors might form consortia in order to meet the preliminary conditions. In 2000, the previous Cabinet declined to sell BTC to a joint venture of OTE and Dutch group KPN, which offered $610 million for a 51-percent stake, in a package with a digital mobile telephone license. The license for the country’s second GSM operator was won separately by OTE in a tender in late 2000 for $135 million. Now, a government privatization program for 2002 envisages revenue of only $100 million from the BTC sale. BTC’s fixed-line monopoly expires in 2003. Its profit in 2001 is expected to be 180 million levs ($80.7 million), a 37-percent rise over the previous year. Let’s remind ourselves of the biblical story as it is told in the Good Book: «And Samson took hold of the two middle pillars upon which the house stood, and on which it was borne up, of the one with his right hand, and of the other with his left. And Samson said, ‘Let me die with the Philistines.’ And he bowed himself with all his might; and the house fell upon the lords, and upon all the people that were therein. So the dead which he slew at his death were more than they which he slew in his life.» Indeed, how very much like modern human bombs?