NEWS

OTE wants to shed Armentel

Four years after acquiring all but full ownership of Armenia’s state telecom company, OTE Telecom is now looking for cut-price buyers for the struggling firm, sources said yesterday. This move comes just over a week after OTE struck a deal with the Romanian government to pour another $243 million into cash-strapped state Romtelecom – in which OTE bought a 35-percent share in 1998 for $675 million – in exchange for a controlling stake. OTE paid $146 million (plus another $16 million in taxes) to acquire 90 percent of Armentel in 1998, under its expansion drive which mainly targeted Balkan countries. Now, sources in Yerevan say there is considerably buying interest in OTE’s Armentel stake. However, the company’s value has shrunk, and offers are expected to range from $50-70 million. So far, three prospective buyers have shown an interest in Armentel. The first, who is believed to have visited Athens last week for talks with OTE officials, is a Lebanese telecom entrepreneur who is already active in the Nagorno Karabakh area and is believed to have established good contacts with OTE officials. Another alleged suitor is the US-Armenian Sarkissian family, which has business interests in California and excellent political connections with the government in Yerevan. And, according to other sources, the MTS mobile telephony company, which is of Russian interests, is also showing an interest. Meanwhile, today the Armenian government is to auction a 7.5 percent package of OTE’s Armentel shares to cover OTE’s share of legal costs incurred in common with the Armenian government that OTE has failed to pay.