ECONOMY

Bulgaria says BTC sale ‘not at any price’

SOFIA – Bulgaria hopes to wrap up a key sale of its state telecom monopoly BTC by the end of the year but will not seek a deal at any cost and may abandon it if bids are too low, the country’s privatization chief said yesterday. Cabinet officials have previously indicated that the repeatedly delayed sale should now be completed even at a low price to reassure investors in Sofia’s commitment to reforms and inject fresh funds toward upgrading BTC’s antiquated network. «My opinion is that there should not be a deal at any cost,» privatization agency executive director Apostol Apostolov told Reuters in an interview. «There will be a deal if the bids at least top the BTC evaluation made by the consultant, which is relevant to the global conditions in the telecom sector,» Apostolov said. He did not say what value the consultants had put on BTC but industry experts said it could be at least $350 million. Bulgaria, which has built up substantial fiscal reserves and posted growing tourism revenue over the past months, would be able to cover its current account deficit and meet foreign debt payments even without the BTC privatization revenue. But the sale, Bulgaria’s biggest this year, and that of tobacco monopoly Bulgartabak, are seen as a test of the government’s commitment to economic reforms in one of the poorest EU aspirants. Although Bulgaria has not set a minimum price for BTC, the government’s privatization program envisages a minimum revenue of $100 million from the sale, a figure that reflects diminished returns in a telecom market that is well below its peak. At the height of the telecoms boom in 2000, the previous government rejected the sole bid placed by Greece’s OTE and Dutch KPN of $610 million for a 51-percent stake in BTC in a package with a second GSM license. Two years later, initial cash bids for 65 percent in BTC, placed in May, had been pitched at $100 million to $250 million. Offers came from a consortium of Turkish 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. BTC, which serves 35 percent of Bulgaria’s population of 8 million, posted a net profit of 241 million levs ($120 million) in 2001, a 43-percent rise year-on-year.