Government Approves Report on the Sale of BTC to OTE/KPN.


The Government approved Thursday the report of the working group in charge of the privatization of the Bulgarian Telecommunications Company (BTC) as a basis for finalising the talks with the Dutch-Greek consortium KPN/OTE. This was announced by Transport and Telecommunications Minister Antoni Slavinski. The working group and the Greek-Dutch consortium now start work on the finalisation of the agreements making up the deal. These include a contract for the sale of 51% of the BTC shares, which is the basic document; a contract between the shareholders; articles of association; agreement on indemnity; a draft licence agreement; a draft licence for a GSM operator and others. Slavinski reiterated that the agreement on indemnity and the government guarantees will be moved for ratification by Parliament. Asked when the European commission is expected to say whether the anti-trust rules have been observed in this deal, Slavinski said that a statement is expected after the signing of the deal and on the request of the consortium. In March KPN/OTE raised its offer for the 51% stake in the BTC to USD 600 million from USD 510 million. Under the latest version of the deal, Bulgaria would get USD 460 million as upfront payment, with a further USD 20 million set aside to cover a possible account deficit in BTC for 1999. The consortium will pay another USD 120 million if parliament amends the privatisation and telecommunications laws to enable the government by July 1 to license KPN-OTE to run BTC and a second cell phone operator. Bulgaria would pay a penalty of up to USD 250 million if during the next 10 years it fails to sustain the negotiated legal framework, which apart from licensing conditions, ensures the government does not interfere with BTC's operation.