Treasury continues to mull options on TPSA stake
The Treasury Ministry will continue to consider other options to sell a slice of Telekomunikacja Polska (TPSA), even though it is holding negotiations with France Telecom (FT) (http://www.francetelecom.com) and expects the French to propose a final price for additional shares of Poland's national telecom operator on Tuesday, a ministry official said last week.
The ministry is continuing to mull a convertible bond issue or the introduction of another investor to buy additional shares of TPSA following FT's failure to exercise an option to purchase an additional 10% stake of TPSA, said Agnieszka Dluska of the ministry's press office.
"We are leading negotiations and are considering other possibilities at the same time," Dluska said.
The ministry might also consider increasing the amount of shares it would issue during a secondary public offer of TPSA's shares later this year, she said. It originally planned to float 14-30% of TPSA's shares on the bourse in September. FT and its partner, Polish firm Kulczyk Holding (http://www.kulczykholding.pl), would be allowed to buy at market value 6% of the shares floated, according to the TPSA privatization agreement they signed in July 2000.
Anna Krajewska, FT's spokeswoman in Warsaw, said the French company had no comment on what the ministry said about other options it was considering while the negotiations were in progress. She also had no comment on the ministry's announcement that it expected a final price from FT on Tuesday.
In addition, Krajewska reiterated the French company's previous statements that it would pay a "realistic price" for additional shares, meaning a price closer to the current market price. Dluska declined to say whether the ministry would accept a lower price than the previously agreed on amount of about zl. 40 per share. FT and Kulczyk Holding purchased a 35% chunk of TPSA last July for zl. 18.6 billion ($4.2 billion), or zl. 38 per share, and signed an agreement for an option to buy another 10% at about zl. 40 per share by July 31, 2001. On July 31, TPSA's shares closed at zl. 15.90.
Andrzej Wisniewski, spokesman for Kulczyk Holding, refused to comment or answer any questions about the negotiations with the ministry.
The Treasury Ministry, which handles the sale of state assets, also said the negotiations could involve a different size stake of TPSA. Neither the ministry nor FT would provide further comment.
The Treasury Ministry started talks with FT and Kulczyk Holding last Wednesday after the two companies notified it about their desire to begin negotiations and to gain a majority stake in TPSA. The notification came immediately following the pair's decision not to exercise the option to purchase an additional 10% of TPSA by the July 31 deadline.
Disagreement over the share price derailed the prospective sale of the additional 10% stake last week. FT and Kulczyk Holding did not exercise their option due to TPSA's depressed stock price, while the ministry stuck firmly to the previously agreed price.
The sale of additional shares of TPSA is one of the major privatization transactions expected this year. The ministry was counting on about zl. 5.6 billion ($1.3 billion), from the sale of the shares as part of the planned zl. 18 billion ($4.3 billion) the state intends to raise this year from the privatization of state assets, according to news reports. While some analysts said the deficit from the TPSA sale would leave a huge hole in the federal coffers, the treasury downplayed the prospective shortfall.
"Estimations (for TPSA's shares) have been made carefully, but not on the highest possible price," Dluska said, noting that several other privatization projects would be launched and probably completed this year.
