Japan's NTT Sells 35% Sri Lanka Telecom Stake for $297 Million
COLOMBO (AFP)--Japan's Nippon Telegraph and Telephone sold its 35.2% stake in state-owned Sri Lanka Telecom for $297 million, the Colombo Stock Exchange (CSE) said Tuesday.
The purchase by Malaysia's Global Telecommunications Holdings NV ended the largest single investment in Sri Lanka by a Japanese firm.
Global, which also owns Maxis Communications of Malaysia, bought the shares at 50.50 rupees (47 US cents) each making it the biggest single transaction ever conducted on the stock exchange, CSE officials said.
Sri Lanka Telecom shares had traded at about 40 rupees before the sale was announced and rose 15.8% to 48.00 rupees in intraday trade Tuesday on a statement by Global Telecommunications it would be willing to buyout the remaining shareholders at 50.50 rupees.
Sri Lanka Telecom, was privatized in 1997, when the government sold a third of the company to NTT for $225 million. The government retains 49.5% of SLT, with the balance held by the public and employees.
"That means NTT makes a capital gain of 75 million dollars after 10 years," Arjuna Dassanayake from DFCC Stockbrokers, the selling broker of the deal said.
Tuesday's deal took more than a year to conclude, after a lawmaker from the ruling People's Alliance party petitioned the Supreme Court to stop the transaction.
In March, the Supreme Court ruled that the sale was between two private parties and the state had no role in it. However, the court ordered that any change in the management must be through a transparent process.
Sri Lanka Telecoms net profit rose by a lower-than-expected four percent in 2007 to $52.25 million as tariff cuts in its final quarter hurt earnings. The company also controls 16% of the country's cellular market.
Japan is the biggest aid donor to Sri Lanka and a key player in a moribund peace process to end decades-long separatist conflict.
(END) Dow Jones Newswires
Posted to the site on 1st April 2008
