Central Telegraph General Director Pavel Kuznetsov
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Govt Sells Central Telegraph
Russia’s government intends to dispose of 21.78 percent in Central Telegraph and added it to this year’s privatization list. It won’t be the first time that the stake is put up for sale but a buyer is likely to be found this year. The stake will probably lure one of seven interregional companies of Svyazinvest, Central Telecom, which is due to consolidate with Central Telegraph by the first quarter of 2009.
The 21.78-percent stake in Central Telegraph has been added to the 2008 privatization list, says the ruling of government promulgated via its web yesterday. Svyazinvest that is the principal holder of the company declined to comment on the news yesterday. People in Central Telegraph didn’t comment either.
Central Telegraph was set up in 1995. In addition to telegraph services, it renders the services of telephony/wide-band Internet access to roughly 120,000 subscribers in Moscow and the Moscow region. The company generated 2.37 billion rubles in the first nine months of the previous year. Svyazinvest owns 38.25 percent (51-percent common stocks) in Central Telegraph, Russia’s Federal Property Fund RFFI has 21.78 percent, North-West Financial Co. holds 10.59 percent and the free float accounts for the remainder.
The state-controlled stake in Central Telegraph was first put up for sale in 2003, to no avail though. But the deal is likely to be clinched this year. “Given the forthcoming consolidation of Central Telegraph and Central Telecom (Svyazinvest holds 50.7 percent, and free-float accounts for the remainder), the chance that RFFI will ultimately sell its stake in Central Telegraph is rather high,” said IKS-Consulting analyst Konstantin Ankilov.
“The current capitalization of Central Telegraph equals $158 million, so RFFI’s stake of 22 percent costs $34.8 million, but in view of the premium, the asset could cost from $35 million to $40 million. In equivalent of Central Telecom’s stake, it corresponds to 3 percent of the stocks,” said IFK Metropol analyst Sergei Vasin, specifying that if Central Telecom refuses to buy out that stake, it will probably go to Prosperity Capital Management (PCM). PMC has acquired over 14 percent in Central Telecom and owns 17 percent in South Telecom Company.
www.kommersant.com
All the Article in Russian as of May 15, 2008
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