Vivendi sale of ET stake threatens Elektrim debt payment

Press reports indicate that Vivendi of France is planning to sell its interest in Elektrim Telekomunikacja (ET). Both Gazeta Wyborcza and Zycie quote a Thursday Financial Times article, which stated that representatives of the Lazard investment bank have contacted several possible buyers of the 51% share package. It is unclear who the potential investors might be, but market insiders mention Deutsche Telekom, which was previously involved in a fierce battle with Vivendi over the ET stake. Vivendi's 51% holding in ET is strategically important as it brings with it control over Polska Telefonia Cyfrowa (PTC), which owns Poland's largest mobile operator, Era GSM. A lthough Vivendi representatives declined to comment on the reports, they did admit that ET "is not an integral part of the company's strategy." A d ecision by Vivendi to sell the shares is likely to have an adverse effect on its relations with Elektrim, which had been hoping to raise euro 500 million for covering its debts through the sale of its own 49% stake in ET to the French group. According to Bob Creamer, an analyst with Raiffeisen Zen tralBank, Vivendi may still be interested in buying the Elektrim holding, prior to selling the whole of ET on to a third party. However, in view of the latest developments, Elektrim finds itself in a much weaker bargaining position. (Gazeta Wyborcza, Jan. 26-27, p. 29; Zycie, Jan. 26-27, p. 10) M.T.K.