ECONOMY

State holding in Romtelecom is set to be floated by November

BUCHAREST (Reuters) – Romania will float its 46 percent stake in leading fixed-line phone operator Romtelecom by November in a sale valued at about $1 billion, Communication Minister Zsolt Nagy said yesterday. The Romtelecom sale, expected in October or November, will be the EU candidate’s biggest share offering and analysts say it will boost volumes on the stock exchange and bring it in line with bourses of the ex-communist peers that joined the EU in 2004. The government had said earlier this year it planned to float its shares in Romtelecom by the end of September but Nagy would not give a reason for the delay. «In October or November the planned initial public offering is due to take place,» Nagy told Reuters in a phone interview. «The value of the stake is estimated at around 3 billion lei ($1.06 billion).» The company, a former fixed-line monopoly, is majority-owned by Greek telecoms company OTE, which paid $243 million in 2003 to raise its stake to 54 percent from 35 percent. Eastern Europe saw its highest number of stock market listings last year, with volumes surging 91 percent to $8.9 billion from the year before. Romania hopes to join the wealthy bloc in 2007. Nagy said a deal with investment bank Credit Suisse (CSFB), which will advise on the sale, will be sealed next week. «The deal with CSFB will be given the green light by the government next week,» Nagy said. «Then, they could start working on (the IPO).» Nagy reaffirmed original plans to list Romtelecom on the Bucharest Stock Exchange and on a foreign bourse. «It’s up to the consultant to chose a foreign bourse to list it.» Sources familiar with the matter had said that when it floats, Romtelecom might take a secondary listing of global depository receipts in London. Romtelecom recorded a 12 percent year-on-year rise in 2005 net profit to 237.9 million euros on a 10.3 percent rise in revenues to 925.7 million euros. Since its 2003 liberalization, the Romanian telecoms market has attracted around 74 new phone operators, but Romtelecom has kept its dominant role, retaining a share of 90 percent of the market.