Ukrainian Government Sells State-Owned Ukrtelecom for US$1.3 Billion
Published on: 15th Mar 2011
Note -- this news article is more than a year old.
The Ukrainian government has sold the state owned telecoms network, Ukrtelecom for USD1.3 billion to an Austrian private equity firm. The sale, for 92.8% of the company was to ESU LLC, a Ukrainian subsidiary of Austrian EPIC Concern.
The selling of Ukrtelecom became the biggest privatisation deal made so far by the government of President Viktor Yanukovych.
Earlier, Peter Goldscheider, one of EPIC's managing partners, commented that this is a long-term investment and that his Vienna-based privatization and investment company potentially plans to attract strategic investors and launch the initial public offering (IPO). It has been also reported that along with the price of the agreement, the buyer adopted responsibility to repay Ukrtelecom's loans (approx. USD160 million) and carry out a number of investment commitments.
Last year, the Ukraine's State Property fund (SPF) announced bidding for the privatization of 92.79 percent of the Ukrtelecom. The ESU LLC, EPIC's Ukrainian subsidiary was the only bidder, hence the auction has been cancelled. Following the independent assessment of Ukrtelecom by a Ukraine-based consulting company Ostrov, Ukraine offered EPIC the direct sale for UAH 10.575 billion (approx. USD 1.3 billion) and the offer has been accepted.
As of today, Ukrtelecom controls about 80 percent of Ukraine's fixed-line market and has a small mobile business Utel providing services to more than 630,000 customers. Currently, Ukrtelecom possesses a license to provide 3G services. In addition, Ukrtelecom has created the most powerful high-capacity national data trunk network in Ukraine based on the modern DWDM technology, with 4 GBits/sec transfer capacity.
The private Austrian investment company EPIC was founded in 1991 to provide consulting and investment services for conducting privatizations in Central and Eastern Europe.