Elektrim to sell Internet assets after Vivendi deal
By : Roseanne Gerin
Power and telecom conglomerate Elektrim is holding talks with prospective investors to try to sell off some its Internet-related and data transmission subsidiaries and plans to present a strategy for its online operations in a few weeks, Ewa Bojar, Elektrims spokeswoman, said last week.
Elektrim (http://www.elektrim.pl/english/prasa_inpras_2001_09_05.htm) and Vivendi Universal (http://www.vivendi.com) signed a deal last week in which the French utilities and media concern will purchase Elektrims fixed-line telecom assets for E491 million. Vivendi will also buy the firms cable television assets for $150,000 and gain control of Polska Telefonia Cyfrowa (PTC), the countrys largest mobile operator.
The deal was the long-awaited conclusion to the companies negotiations based on a letter of understanding they signed on June 27 in which Vivendi was given an option to buy Elektrims telecom and Internet-related assets for E589 million in cash in loans.
While the finalization of the deal gives Elektrim much needed cash, the French declined to purchase the Polish firms Internet and data transmission companies, leaving Elektrim to either find investors or try to revive the companies. Neither company stated a reason for Vivendi declining to purchase the online assets. Antoine Lefort, a Vivendi spokesman, did not return phone calls.
We have some offers from very serious investors, said Bojar about the firms Internet assets, but she refused to make further comments. The portal Poland.com (http://www.poland.com), electronic-business service firm eCenter and IT company CT Creative Team are among the holdings in Elektrims Internet portfolio.
Cash-strapped Elektrim, whose debts are about E800 million, will unlikely pump any significant amounts into its online subsidiaries. Michał Marczak, a telecoms analyst at BRE Bank Securities, said it would be difficult for Elektrim to sell off its online assets because of the negative sentiment of investors putting money into Internet companies and because little is known about the core activities of some of the units.
Probably some will be sold, some will (go) bankrupt, and probably Elektrim will have loss(es), he said. I cannot see a company interested in those companies now.
Poland.com, in particular, will be hard-pressed to find an investor because it needs a lot of money to develop, it is not generating cash and (it) is not a leading portal, Marczak said. Last Thursday, the financially troubled portal presented a restructuring plan to Elektrim in the hope of resuscitating its operations.
