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Corporate Briefs

EBRD's entry into Slovak Telecom only temporary
VSŽ Košice ends 1999 with loss of 6 billion crowns
Three biggest investors favoured in ST privatization

EBRD's entry into Slovak Telecom only temporary

The sale of the FNM (national privatization agency) stake in Slovak Telecom (ST) is expected to be carried out by mid-April, and its 15% share will most likely end up in the hands of the European Bank for Reconstruction and Development (EBRD).
The sales contract should contain an option enabling the FNM to re-purchase the stake after an unspecified period, Deputy Telecom Minister Dušan Faktor said on Feburary 28.
When weighing candidates for the FNM stake, the ministry strived for neutrality regarding the interests on the telecom market, stated Faktor. The EBRD is an institution that has already been engaged in Slovakia, and its presence in ST's portfolio has inspired the confidence of foreign investors and, thus, positively influences the market price of shares.
The market value of the FNM stake cannot be specified until the transaction is completed. However, the price of one share is expected to equal the price at which a future investor will privatize 51% of ST's shares, and the EBRD is willing to provide an advanced payment for this purpose, Faktor said.
Market analysts have speculated that the reason the FNM is so anxious to sell its shares ahead of time is that is does not have sufficient funds to meet its current obligations.


VSŽ Košice ends 1999 with loss of 6 billion crowns

According to preliminary unconsolidated and unaudited results for 1999, the operating profit of VSŽ Košice, Slovakia's giant steelmaker and largest metallurgical company, exceeded 4 billion crowns and net earnings for the year totalled 400 million crowns.
However, these results are influenced by the need to set aside additional provisions and reserves in an aggregate amount of 6.3 billion crowns to compensate for losses from previous years, including a reserve for taxes owed.
These figures, provided by VSŽ spokesman Jozef Marko on February 29, mean that VSŽ's 1999 accounting loss will be approximately 6 billion crowns, thereby clearing the company's balance sheets of the "consequences of the past," Marko said.
"We can now already say that VSŽ is a stabilized company. The most important thing to do now is sign contracts with banks, restructure our debts, agree on the definite amount of tax payments due, and then agree on the entry of a strategic investor into VSŽ," VSŽ President Gabriel Eichler said.


Three biggest investors favoured in ST privatization

Due to the number of investors interested in the privatization of a 51% stake in the Slovak Telecom (ST), the most likely buyers will be one of the three biggest candidates.
However, conclusions cannot be made at present because other, smaller telecom companies have also shown interest, said Deputy Telecom Minister Dušan Faktor on February 28.
In January, potential bidders for capital entry into Slovak Telecom were sent blueprints of the sales contract, the contract on subscribing the shares, and a shareholders agreement.
In March the ministry expects to receive indicative bids from interested parties with comments on the documents handed out as well as on the draft license, which will be discussed during ensuing negotiations.
The three biggest candidates for ST privatisation - Telekom Austria, the Dutch KPN Telecom, and Deutsche Telecom - most likely will submit their bids to the ministry by mid-March, stated Faktor, with the selection process of the strategic partner to end in April.


Compiled by Keith Miller from SITA.

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