EUROPEAN BANKERS TO HELP UKRTELEKOM REPLENISH STATE COFFERS

The State Committee for Communication and Informatization work group has developed a new bill On the Specifics of Ukrtelekom Privatization. According to Committee Chairman Oleh Shevchuk, this time the bill has a very high probability to be approved by Verkhovna Rada, just as 2000 Budget, with which the bill is inseparably linked (the State Property Fund plans to receive UAH 750 million from selling a 25% share in Ukrtelekom. We recall that of late Parliament has successfully rejected the budget proposed by the Yushchenko government). The authors tried to safeguard to the utmost the interests of the strategic investor on whom they count. EBRD Executive Director for Ukraine, Romania, Moldova, Georgia, and Armenia Yuri Poluneyev thinks that the main requirement for a strategic investor in Ukrtelekom is technological and financial experience in the field of communication.

The EBRD and the committee have reached an agreement on Ukrtelekom pre-privatization financing. The amount was not announced, but Mr. Shevchuk stressed that it totals a sum, which the EBRD has never hitherto given anyone.

Yuri Poluneyev named several financing options: “It [the funding] may be granted to Ukrtelekom after selling shares to a strategic investor and converted into shares at a price formed at the moment of privatization, that is the EBRD can buy shares even before privatization and in this way grant funds to Ukrtelekom, which will pay its taxes due. Another option is to issue a so-called convertible credit with the right of its repayment through conversion into shares.

Both the committee and Ukrtelekom are highly optimistic. But the most complicated for them lies ahead — the second hearing of this issue in Parliament. It is difficult to say how soon this will happen, but in accordance with a presidential decree the Cabinet was supposed to present the bill before January 15.