Austria’s EPIC plans to restructure Ukrtelecom after purchase

epic-head-logoAustria’s EPIC, whose Ukraine-based unit ESU was the only company to have filed a bid to buy the Ukrainian government’s 92.79% stake in fixed-line monopoly Ukrtelecom, plans to restructure Ukrtelecom following the purchase, Peter Goldscheider, EPIC’s managing partner, told PRIME-TASS late Tuesday.

Goldscheider said the planned purchase of Ukrtelecom was a long-term investment for EPIC. He also said he was surprised that Russian companies did not file any bids for the Ukrtelecom stake, adding that he expected competition from Altimo, the telecommunications arm of Russia’s multi-industry holding Alfa Group, and from major Russian mobile operator MTS.
EPIC is ready to make serious investments in Ukrtelecom to carry out a large-scale restructuring of the company’s operations, Goldscheider said. He also denied a rumor that EPIC was acting on behalf of Deutsche Telekom.

The State Property Fund of Ukraine announced an auction for the government’s stake in Ukrtelecom in October. The starting price for the stake has been set at 10.5 billion hryvnas. Bids were being accepted until Monday. A total of seven companies expressed an interest in taking part in the auction, and five of them signed confidentiality agreements.
According to earlier reports, MTS and Ukrainian financial and industrial group System Capital Management (SCM) were considering taking part in the auction.

On Wednesday, the fund announced a tender to choose an independent appraiser of the government’s stake in Ukrtelecom. Bids for the tender are accepted till December 30, while the tender is scheduled for January 6, 2011, the fund said. The fund is carrying out a tender because only one company had filed a bid for Ukrtelecom stake. The fund’s Chairman Alexander Ryabchenko said Tuesday that the stake could not be estimated at less than 10.5 billion hryvnas. An independent appraiser will have 30 days to estimate the value of the stake, the fund said.

According to Ukrainian brokers, Ukrtelecom shares fell 10% on Tuesday and continued to fall on Wednesday. The company’s capitalization fell 16.8% during the two days to 9.9 billion hryvnas.

EPIC is a full-service investment house for Central and Southeastern Europe, Turkey, Russia, and other countries of the Commonwealth of Independent States (CIS). It focuses on voucher privatization, direct equity investment, and providing consulting and investment services.

Established in 2005 in Kiev, ESU focuses on rolling out and modernizing mobile operators’ networks, providing technical support, supplying equipment, and providing logistics services. It has branches across Ukraine.
The company’s net profit amounted to U.S. $430,000 in 2009, while its revenue was at $16.5 million. The accounting standards used were not available.


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