ECONOMY

Bulgaria says it doesn’t favor any of the prospective BTC buyers

SOFIA – Bulgaria’s Communications Minister Plamen Petrov said yesterday that his government would give no preference to a Turkish consortium that includes a telecoms investor as it put state carrier BTC up for sale. Bulgaria has attracted three bids for up to a 65-percent stake in its landline monopoly BTC – a consortium of industrial conglomerate Koc Holding and Turk Telekom, a group led by British-based equity house Advent International, and an American International Group Inc investment fund. Unlike the Czech Republic, which insisted that bidders for its aborted telecoms privatization include telecoms companies, Bulgaria has been keen not to dissuade any potential buyers of a telecoms monopoly which is in dire need of modernization. «No one says a strategic (telecoms) buyer is in a privileged position. A candidate which includes a telecoms group is not favored in any way; all have equal chances,» Petrov told Reuters in an interview. The BTC sale, the biggest state privatization this year, is seen as a key test for the reformist Cabinet’s bold sell-off plans and is needed to help cover a widening current account gap in the European Union aspirant with the lowest GDP per capita. «We want to ensure fair play in a transparent process. We will leave the competition to the bidders and let the market set the proper price of the deal,» Petrov said. Analysts agree that a sale dominated by financial investors is likely to further depress a price already hit by a global sector slump. Bids in a two-part tender are expected to be pitched at around $330 million. But Petrov said he was unworried by the presence of short-term investors, which are renowned for driving hard bargains in the hope of snapping up cheap assets and selling them on for a profit some two to four years later. «These are first-class investors and it is a huge mark of success that we have managed to attract them at a time when the (telecoms) sector is facing a liquidity crisis and when people run a mile when they hear the word ‘telecom’,» he said. «Now we have competition among three bidders. In 2000, when investors were throwing cash into telecoms, BTC attracted a sole bid,» Petrov said, referring to a previous attempt to sell BTC, whose landline monopoly expires at the end of this year. At the height of the telecoms boom in 2000, the previous government rejected a sole offer by Greece’s OTE Telecom and Dutch partner KPN Telecom of $610 million for a 51-percent BTC stake. The bid included a GSM license. But in a market that has seen telecoms shares plunge by over 70 percent in two years, the Bulgarian government has set no minimum BTC price – and has foreseen a mere $100 million as a minimum revenue from the sale in its privatization program. The Bulgarian government is expected to announce a shortlist within a few weeks and hopes to complete the deal by end-July.