Vreme: OTE To Decide On Buyout Bid In Romtelecom By May 27

05.18.2011 By Florentina Dragu

Romanian IT&C minister Valerian Vreme on Wednesday said Greek OTE will decide on a buyout offer for the state’s remaining 46% in hard line telephony operator Romtelecom by the end of next week.

"I've met with officials from OTE and Deutsche Telekom in the morning and we've discussed about the Romanian telecom market in general and about Romtelecom and Cosmote Romania in particular," Vreme said.

He said the meeting was informational and OTE didn't made an offer for the stake in Romtelecom.

In a press statement later today, OTE's chief executive officer Michael Tsamaz said the Greek company would draft a written proposal regarding "the future of OTE's investments in Romania.

Last year, Romania announced plans to sell off its holding in Romtelecom and it had asked OTE to present a buyout offer by December 31, 2010. Per OTE's request, the deadline was delayed twice, until May 2011.

OTE, Greece's biggest telecom company, owns 54.01% in Romtelecom, while the remainder shares are in the ministry's hands.

Mid-February, the ministry said it had initiated talks with several investment banks on the possible listing of Romtelecom's shares. The ministry values its stake in Romtelecom at EUR1 billion.

Romtelecom is Romania's largest fixed line telecom operator. The phone company reported turnover of EUR717 million in 2010, down 8.4% on the year.

In 1998, OTE paid the Romanian authorities $675 million for a 35% stake in Romtelecom, plus usufruct agreements over another 16% of the company's shares.

The Greek company became majority holder in Romtelecom in 2003, after it paid another $273 million to the state.

Deutsche Telekom owns 30% in Greece's OTE.