Serbia Has No Immediate Plan to Sell Telecommunications Co.

Serbia has no immediate plans to sell state-run Telekom Srbija AD amid reports of interested buyers as the government has not decided yet on its asset-selling policy.

Prime Minister Ivica Dacic’s nine-month old Cabinet has not “yet talked about” the sale of Telekom Srbija and there is no plan to sell the company “at the moment,” Finance Minister Mladjan Dinkic told reporters in Belgrade today. “There is some interest in Telekom Srbija, from two or three sides, but we must first sit down and see what we plan to do with public companies and if and where we plan to divest.”

Moscow-based AFK Sistema JSFC is interested in taking part in a future sale of Telekom Srbija, as well as Abu Dhabi-based Emirates Telecommunications Corp., or Etisalat, and an unnamed big U.S. company, Belgrade newspaper Blic reported today, citing an unidentified government official. Dinkic did not on comment the report.

The government consolidated its ownership of Telekom Srbija in early 2012, buying back a 20 percent stake from Hellenic Telecommunications Organization SA. An attempt to sell a majority stake in the state phone company in 2011 failed, when Telekom Austria AG offered as much as 1.1 billion euros ($1.43 billion), less than the minimum price of 1.4 billion euros set by the government.

The previous Cabinet of Prime Minister Mirko Cvetkovic set the market value of Telekom Srbija at 2.27 billion euros, promised to give away 22 percent of the equity to company workers and Serbian nationals and list the company on the Belgrade Stock Exchange.

Dacic’s Cabinet has said it would not sell the phone company for less than 2.5 billion euros for the entire stake and has stopped its debut on the bourse.

Telekom Srbija’s 2012 net income fell by almost half to 11.25 billion dinars ($131.75 million) from 22.27 billion dinars in 2011, as assets contracted and long-term liabilities and spending expanded.