VILNIUS - The European Bank for Reconstruction and Development has sold its 7.73 percent stake in Lietuvos Telekomas, Lithuania's main landline telephone operator.
The sale, placed with institutional investors through CA IB, the investment arm of Bank Austria Creditanstalt, was worth approximately 146 million litas (42.3 million euros) based on the July 28 closing price of 2.32 litas per share.
Peter Reiniger, director of the EBRD's business group, said the bank served as a cornerstone investor at the time of the telecom's privatization. "Since then the company has continued its transformation into a prominent telecom provider in Central Europe through modernization and development," he noted.
EBRD originally acquired the stake in Lietuvos Telekomas in June 2000 as part of a state sell-off, when the government sold 25 percent of the company.
"The bank has full confidence in the ability of LT's management to develop the company and expand its range of services. By selling its block to a broader institutional investor base, at a time when interest in Baltic securities is increasing, the bank seeks to deepen the liquidity of LT shares and contribute to the development of Lithuania's capital markets."
Yet at the same time, Lietuvos Telekomas has been losing its subscriber base as many Lithuanians drop their landline service in favor of cellular phones, while smaller operators have taken the company to task. Last week it was reported that competitors have joined forces and issued a complaint over Lietuvos Telekomas' alleged abuse of its dominance of the market. The complaint was submitted to the Communications Regulatory Authority (RRT) by Nacionalinis Telekomunikaciju Tinklas (National Telecommunications Network), the provider of landline services uniting twelve cable TV providers.
Lietuvos Telekomas, which is 60-percent owned by Scandinavia's TeliaSonera, posted 37.2 million litas in net earnings for the first six months of 2005, a jump of 2.7 times year-on-year.
