Romanian crossed line

A team of senior Hellenic Telecommunications Organization (OTE) officials left yesterday for Bucharest for talks aimed at saving the Greek company’s investment in Romtelecom. The company’s biggest foreign investment, valued at about 1 billion dollars, appears to be heading for a bad end. OTE President and Managing Director Lefteris Antonakopoulos, who was expected to travel to Romania, has postponed his visit indefinitely. An OTE news release said he would visit Bucharest «when the meetings of the two sides culminate in agreement.» Antonakopoulos said yesterday: «Our interest in the Romanian market remains, and the talks between the two shareholders are firmly within the framework agreement signed in June 2002» by OTE, the Romanian government and the European Bank for Reconstruction and Development (EBRD). OTE was scheduled to make an equity contribution of up to $200 million on September 6. This was not implemented. OTE was also supposed to provide $250 million in debt financing on December 31, 2002. The Romanian government was to make a number of changes in the charter of Romtelecom and change the law regarding privatizations. Implementing Romtelecom’s restructuring plan would raise OTE’s stake to 51 percent, making it the major shareholder. The Romanians have dragged their feet and the restructuring plan has yet to be implemented. OTE, which paid $675 million to buy a 35-percent stake in Romtelecom in 1998, wrote down some 256 million euros of its investment there in July. The New Democracy opposition charged in Parliament a year ago that OTE had paid an exorbitant amount for its stake in Romtelecom, noting that OTE’s other Balkan investments might have a similar fate. OTE has a 20-percent stake in the Serb telecommunications organization and CosmOTE, OTE’s mobile phone operator, has an 85-percent stake in Albania’s mobile phone company. OTE’s effort to buy out Bulgaria’s telecom was blocked by the Bulgarians when they rejected the «commitment to buying telecommunications equipment from our monopolistic purveyor, a practice that applied in the instances of Serbia, Albania and Romania,» New Democracy MP Anastassios Papaligouras said yesterday. This was a reference to Greece’s Intracom telecoms supplier.

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