Tough call for Vivendi
The long-standing battle over PTC, owner of the Era GSM brand, has seen a dramatic escalation in tactics over the past few days. German DT mobile, which owns 49 percent of Era's shares, has surprisingly aligned itself with Polish Elektrim, who, together with its former partner French Vivendi Universal, controls the crucial 51 percent stake in the company.
In a true coup d'etat, the new German and Polish alliance established a second managing board, which immediately called for the discharge of the existing management. The introduction of new management was based on a ruling by a Polish court, which claimed Vivendi has no right to PTC's shares.
However, Vivendi, which through a daughter company has already invested around zł.7.8 billion in the project, is refusing to accept the legality of the current situation. With the help of security guards, the now former management are refusing entry to the newly elected board and have barred them from the PTC building. The reason for this: the French have another court ruling which contradicts the former one.
The case gained international significance ahead of the first Franco-Polish summit last weekend, where the presidents of France, Jacques Chirac, and Poland, Aleksander Kwaśniewski, were to discuss the issue.
The stakes are high, as Era GSM is the largest and most successful mobile operator on the Polish market, servicing almost nine million clients and reporting record-high net profits for 2004 of zł.1 billion.
The international game-of-three over Era began in 2001, when Elektrim announced its gigantic, EUR750 (zł.2,953) million debt. The French firm Vivendi, which was the single largest creditor, acquired a majority stake in a sub-company of Elektrim, Elektrim Telekomunikacjia (ET) that controlled 51 percent of Era's shares.
Deutsche Telekom, which was already a minority shareholder of Era, protested about this, as it was worried that the operation would jeopardize its plan to become Era's single owner. Indeed, Vivendi and other creditors blocked Elektrim's attempts to sell its stake to the Germans.
After several rulings from the International Court of Arbitration in Vienna, Vivendi's right to Era's shares was questioned, and the concern was advised to return them to Elektrim. For Elektrim this would mean regaining control over Era for free and cashing in the shares with Deutsche Telekom for E1.3 (zł.5.1) billion. Naturally, Vivendi will do its utmost to prevent this.
Should the deadlock continue, it may hit the day-to-day operations of Era, with managers receiving contradictory orders from two different boards. As the situation escalated, no one from PTC was willing to comment on the matter, while anonymous sources close to the company speak of an atmosphere of uncertainty and disorientation. The Vivendi-backed president of PTC, Bogusław Kułakowski claimed later last week that all three parties are expected to sit and talk soon. But Deutsche Telekom's finance chief, Karl-Gerhard Groendhal, told Reuters, referring to his board being blocked from entering the building by guards: "As long as such military actions are under way, I'm not in the mood for talks."
In a true coup d'etat, the new German and Polish alliance established a second managing board, which immediately called for the discharge of the existing management. The introduction of new management was based on a ruling by a Polish court, which claimed Vivendi has no right to PTC's shares.
However, Vivendi, which through a daughter company has already invested around zł.7.8 billion in the project, is refusing to accept the legality of the current situation. With the help of security guards, the now former management are refusing entry to the newly elected board and have barred them from the PTC building. The reason for this: the French have another court ruling which contradicts the former one.
The case gained international significance ahead of the first Franco-Polish summit last weekend, where the presidents of France, Jacques Chirac, and Poland, Aleksander Kwaśniewski, were to discuss the issue.
The stakes are high, as Era GSM is the largest and most successful mobile operator on the Polish market, servicing almost nine million clients and reporting record-high net profits for 2004 of zł.1 billion.
The international game-of-three over Era began in 2001, when Elektrim announced its gigantic, EUR750 (zł.2,953) million debt. The French firm Vivendi, which was the single largest creditor, acquired a majority stake in a sub-company of Elektrim, Elektrim Telekomunikacjia (ET) that controlled 51 percent of Era's shares.
Deutsche Telekom, which was already a minority shareholder of Era, protested about this, as it was worried that the operation would jeopardize its plan to become Era's single owner. Indeed, Vivendi and other creditors blocked Elektrim's attempts to sell its stake to the Germans.
After several rulings from the International Court of Arbitration in Vienna, Vivendi's right to Era's shares was questioned, and the concern was advised to return them to Elektrim. For Elektrim this would mean regaining control over Era for free and cashing in the shares with Deutsche Telekom for E1.3 (zł.5.1) billion. Naturally, Vivendi will do its utmost to prevent this.
Should the deadlock continue, it may hit the day-to-day operations of Era, with managers receiving contradictory orders from two different boards. As the situation escalated, no one from PTC was willing to comment on the matter, while anonymous sources close to the company speak of an atmosphere of uncertainty and disorientation. The Vivendi-backed president of PTC, Bogusław Kułakowski claimed later last week that all three parties are expected to sit and talk soon. But Deutsche Telekom's finance chief, Karl-Gerhard Groendhal, told Reuters, referring to his board being blocked from entering the building by guards: "As long as such military actions are under way, I'm not in the mood for talks."
