Ukraine’s government delayed its Dec. 28 sale of phone company VAT Ukrtelecom because it attracted only one bidder, the head of the state property fund said.
Austria-based Epic Financial Consulting Gesellschaft’s subsidiary in Ukraine was the only bidder that paid the guaranteed deposit of 1.05 billion hryvnia ($131.6 million), the fund’s head, Oleksandr Ryabchenko, told reporters today in Kiev.
“Thus the auction is canceled,” Ryabchenko said. “Now, an independent company will value Ukrtelecom and that price will be offered to Epic’s subsidiary ESU.”
Ukraine, which owns almost 93 percent of Ukrtelecom, has been putting off the sale because of disputes between state agencies. An auction scheduled for December 2009 was also canceled. This time the country set the minimum price for its stake at 10.5 billion hryvnia.
The state property fund will announce the bid for an independent company to value Ukrtelecom tomorrow and will pick the winner in 15 days, Ryabchenko said. The winner has up to 30 days to value the phone company and the price cannot be lower than the minimum, he added.
February Sale
“I think the sale may be in February,” Ryabchenko said. “After Ukrtelecom is valued, the state property fund has also one month to finalise details though I think it will not take us more than a week.”
Ukrtelecom reported income of 47.9 million hryvnia in the first half of the year under Ukrainian accounting rules. The company had a net loss of 124.13 million hryvnia in the same period a year earlier.
“We’ve known this asset for over 10 years,” Epic Managing Partner Peter Goldscheider said today in a telephone interview from Vienna. “This is huge for us.”
As financial investors, Epic would try listing Ukrtelecom on Kiev’s exchange or finding another buyer, Goldscheider said. The Vienna-based company expects Ukraine to calculate a final price for the telephone network within 45 days, at which point Epic can still decide to walk away, he said.
Ukrtelekom would be Epic’s biggest acquisition. Croatia’s Valamar Hotels and Resourts group, with 3,000 employees, is the company’s largest current asset.
The fund also put off the sale of Ukrainian international Airlines, which is almost 62 percent state-owned, until January. Ukraine’s government planned to sell the stake by the end of this month.
The government, which seeks to raise at least 6.35 billion hryvnia this year from state asset sales, received 938.7 million hryvnia as of Dec. 9, the fund said on Dec. 14.
(c) Daryna Krasnolutska, Bloomberg
