State to hold onto Eesti Telekom

  • 2008-04-23
  • From wire reports
TALLINN - The government has announced that it does not plan to sell any part of its interest in Eesti Telekom as a means to balance the increasingly distressed state budget.
The Finance Ministry, which owns the state's stake, said any sale of its holding in the telecommunication company would not, contrary to expectations, make a dent in the state budget, which is seeing a shortfall in revenues due to weaker consumption. 
Besides, by law proceeds from such a privatization would have to be placed in a strategic reserve, the ministry said.

"In other words, we couldn't use the money to cover running costs without its having a negative impact on the budget balance," a ministry spokesman was quoted by the Baltic News Service as saying.
Eesti Telekom, the country's dominant landline operator, pays its stakeholders a solid dividend every year, and the company's financial results remain strong, the ministry said.
"We are therefore pleased to own a stake in Eesti Telekom and are not planning a sale of the shares. At the same time we constantly keep an eye on and analyze the situation and evaluate the expediency of the state's participation," the spokesman said.

Eesti Telekom is 60 percent owned by TeliaSonera, the Nordic telecom group. The government owns about one-fourth and the Estonian Development Fund 3 percent.
The French daily Le Figaro reported on April 16 that France Telecom is exploring the possibility of purchasing TeliaSonera through a share swap.
France Telecom has not confirmed the report.
The Swedish government, a major stockholder in TeliaSonera, which also owns stakes in Lattelecom, LMT, a mobile operator in Latvia, and Teo LT in Lithuania, also declined to comment.