ECONOMY

OK for OTE share buyback

Telecoms operator Hellenic Telecommunications Organization (OTE) said yesterday it plans to buy back its shares in a price range of 1 to 30 euros after receiving the green light from shareholders. Encouraged by the company’s decision to shore up its flagging stock, investors yesterday lifted OTE shares by 2.31 percent. The shares, which closed at 12.38 euros, also benefited from the rally in stock markets around the world that was brought on by positive earning news from the major telecommunications equipment manufacturers. Since the beginning of the year OTE’s equity has slid by 32 percent, in line with the general slump at the Athens stock market. Concerns over the company’s problematic investments in the Balkans have also depressed the stock price this year. Shareholders at yesterday’s extraordinary general meeting approved the extension of the share buyback program initiated last year for another 12 months. When the scheme expired on September 3, OTE had acquired only 2.7 percent of its equity. The remaining 7.3 percent of OTE equity, or 13.6 million shares, has an estimated value of 420 million euros. Shareholders also approved a capital increase via a capitalization of OTE’s reserves. The company increased the nominal value of its shares by 0.19 euros to 2.39 euros after posting substantial capital gains from its real estate assets. While OTE might have taken steps to prop up its share price, uncertainties over its 587-million-euro investment in Romtelecom continue to plague the company. It is still waiting approval from the Romanian government for a $200 million injection into Romtelecom, which faces cashflow problems and an aging network. OTE could, of course, write off its investments. It wrote down the stake by 256 million euros in its 2001 US GAAP accounts, a move which pushed down its stock.