Ukraine Tries Again With Telecom Privatisation

KIEV, Ukraine -- Ukraine's government on Wednesday decided to sell 67 percent of Ukrtelekom, a minister said, the latest move in 10 years of attempts to privatise a major stake in the dominant fixed-lined telecoms operator.


Transport and communications minister Yosip Vinsky, who said last month there was no need for a sell-off yet, told reporters the sale would take place at an open auction.

It is not unusual for sell-offs to be announced, scrapped or contested in court in the former Soviet state where the post-communist privatisation process has been opaque at best.

The list of firms for sale also included the Odessa Pre-port Plant, a major chemicals producer which was also put up for sale last year, and six small regional energy firms.

"They (the government) have decided on a list of privatisations, including Ukrtelekom -- 67 percent," Vinsky said after a regular cabinet meeting.

Last year, the previous government tried to sell five parcels of one percent stakes in Ukrtelekom on the domestic market to test the water for a 38-percent stake sale abroad but was stymied by legal action.

Between 2000 and 2001, the government sold 7.14 percent of Ukrtelekom to the firm's workers and foreign investors. Some of that stake is now traded on Ukraine's illiquid stock exchange.

Ukrtelekom, which became the sixth firm to enter Ukraine's mobile telephone market in November, estimated its 2007 revenues at 7.765 billion hryvnias ($1.55 billion) from fixed-line services, below the 7.879 billion hryvnias it earned in 2006.

The auction of the Odessa Pre-port Plant, expected to fetch more than its $500 million price tag, was halted by President Viktor Yushchenko shortly after it was announced because he said it would hand the buyer an unfair advantage in chemical exports.

Because of delays in both the Ukrtelekom and Odessa sales, the government of former Viktor Yanukovich undershot its 2007 target for privatisation revenues, earning just $475 million from an anticipated $2.1 billion.

The new government of Prime Minister Yulia Tymoshenko said on Wednesday it was convinced it would more than achieve its target of $1.6 billion this year.

"The government will sell (the assets) via open auctions ... in order to receive the maximum amount of revenues. This year we will receive significantly higher revenues than is envisaged in the (2008) budget," Finance Minister Viktor Pynzenyk said.

Source: Guardian UK