Property Fund Says Impossible Fulfill 2010 Privatization Plan without Sale of Ukrtelecom

ukrtelecom-enThe State Property Fund considers impossible to fulfill the 2010 plan of privatization of state property (more than UAH 10 billion) without sale of the state’s stake in Ukrtelecom, Ukraine’s largest telecommunications company, Fund Chairman Oleksandr Riabchenko has told a meeting of the Verkhovna Rada’s privatization commission.

In his words, if they want to get the money for privatization of Ukrtelecom before 2011 the tender for its sale must be called before August 16.

“The only chance to fulfill the privatization plan is to sell Ukrtelecom, and it, as it is known, is under management of the Transport and Communications Ministry… For the money to come to hand this year the competition must be announced on the fifteenth of August,” he said.

Without sale of Ukrtelecom, Riabchenko predicts, the Fund can receive not more than UAH 1.5 billion from privatization (if take into account proceeds from sale of Luhanskteplovoz Holding).

Riabchenko stressed they had to solve two main tasks to sell the telecom company: take out special communications into separate enterprises, and conclude agreements with creditors who borrowed USD 500 million to Ukrtelecom and who after a change of the owner would be entitled to demand early redemption of the credit.

As Ukrainian News earlier reported, the Verkhovna Rada set the proceeds to the national budget from privatization of state property at UAH 10,262.66 million for 2010, but from January to May privatization brought the budget mere UAH 173.4 million.

The State Property Fund intends to offer for sale a 92.79-percent stake in Ukrtelecom.

Ukrtelecom reported a loss of UAH 456.426 million for the year 2009, when its net revenues increased by UAH 225.202 million or 3.39% to UAH 6,870.931 million compared with 2008.

Ukrtelecom has a 78.5% share of the fixed-line telephony market in Ukraine and provides services to 9.9 million subscribers.

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