Telekom Slovenia privatisation faces further delays

Telekom Slovenia privatisation faces further delays

Telekom Slovenia’ privatisation process has again been put on hold, pending approval from the country’s new government when it takes power later this month, sources have confirmed.

Telekom Slovenia announced plans for the sale nearly a year ago in October 2013, but this was suspended in early July by the previous government, which decided to wait until the country’s election.

Law Professor Miro Cerar was voted in as prime minister, but he is yet to be approved by the cabinet, a process expected to complete within two weeks.

“For a successful completion of the privatisation, there needs to be unambiguous government support,” the Slovenian state holding that manages state-owned operations told reporters. “To extend the sale of Telekom Slovenia, we need a clear stance from the new government.”

Privatisation is seen as an important element in Slovenia’s attempt to consolidate public finances, but Cerar is reportedly set to sign an agreement with pensioner’s party Desus and centre-left social democrats to form a new government, both of which are alleged sceptics of privatisation.

Cerar is thought likely to suggest a “controlled” privatisation of the company, whereby the government would sell the incumbent’s business services while maintaining control of its infrastructure, although it is unclear what this would mean for the operator’s mobile network.

Analysts have said that doing so would halve the price of the company, which has a market capitalisation of €840 million.

“I hope the government will not divide Telekom, as in that case it will probably not find a buyer at all,” Jure Vrhunec, a trader at Raiffeisen Bank, told Reuters.

Deutsche Telekom and Turkcell were previously named as interested buyers of Telekom Slovenia, and earlier this year the country’s economic minister said that the company would be privatised by the end of 2014.

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