Bosnia's Federation to conduct due diligence of BH Telecom, HT Mostar

February 10 (SeeNews) - The government of Bosnia's Federation said on Friday it will perform due diligence checks on its telecommunications companies, BH Telecom and HT Mostar, in cooperation with the World Bank and/or the European Bank for Reconstruction and Development (EBRD).

"BH Telecom Sarajevo will be contacted by these financial institutions to sign a confidentiality agreement, in order to assure access to relevant data", the entity's government said in a statement. "The same assessment will follow in Hrvatske telekomunikacije Mostar".

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The Federation government said that a due diligence process in the two telecomminication companies is a commitment it made in the letter of intent it submitted to the International Monetary Fund (IMF) under a funding deal approved last year.

In September, the IMF approved a three-year 553.3 million euro ($588.3 million) loan to Bosnia and Herzegovina to support the country’s economic reform agenda. The loan was hinged on Bosnia's ability to cut public debt, improve the business climate, and secure financial sector stability.

The Federation government controls a 90% stake in BH Telecom and 50.1% of HT Mostar. Local media reported in December that the government of the Federation would complete due diligence of the two companies by end-March 2017 and could launch the sale of its stakes in them by June.

The Federation is one of two entities that form Bosnia and Herzegovina. The other is the Serb Republic.

Telekom Srpske, majority-owned by Serbian state-controlled Telekom Srbija, has clients mainly in the Serb Republic.

($=0.940437 euro)