Romtelecom to be listed in Bucharest this year

LONDON/BUCHAREST (Reuters) – Romania has hired Credit Suisse First Boston to list the country’s leading telecoms company, Romtelecom, in the first half of this year, the government said on Thursday. Sources familiar with the matter said the initial public offering could value Romtelecom at up to $2 billion when it lists in Bucharest and possibly takes a secondary listing of global depository receipts in London. The government is hoping to raise between $500 million and $1 billion through the listing of Romtelecom, the sources say. Confirming an earlier Reuters report, the Communication Ministry said CSFB won the race to advise on the sale of the fixed-line carrier, which has 4.2 million clients across the Black Sea state or 20 percent of Romania’s population. «We hope to sign the financial services contract (with CSFB) as soon as possible so that we can launch the initial public offering in the first half of this year,» Communication Minister Zsolt Nagy said in a statement. In November, the government said it would float a 26 percent stake and put 20 percent into a fund to compensate people making claims for the seizure of assets during the country’s pre-1989 communist regime. The other 54 percent is owned by Greek telecoms company OTE. Romtelecom was not immediately available for comment. The company, which reported a net profit of 107.1 million euros ($129.5 million) in 2004, reversing a 13.1-million-euro loss the year before, may also hire a local broker to help in the listing, one of the sources said. More IPOs expected Romania, which hopes to join the EU as early as 2007, liberalized its telecoms market in 2003 and now has around 70 telephony providers competing in a market of 22 million people. With emerging markets set to be one of the key battlegrounds for investment banks this year, the mandate was hotly contested. The Romanian government received 12 bids from banks looking to advise on the Romtelecom listing. Analysts said the Romtelecom listing would help boost liquidity on the Bucharest bourse and bring the exchange in line with bourses of other former communist countries that joined the EU last May. «The market badly needed such a listing. This is the biggest listing on the (local) bourse in many years. It’ll boost liquidity and capitalization,» said Valerian Ionescu, the head of trading at CA IB brokerage in Bucharest. This year the government also plans to privatize gas companies Romgaz and Transgaz, utility Electrica, bank CEC and communications firm SNR.

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