INTERVIEW - Further Privatisation of Two Bosnian Telcos Expected by End-2009 at Earliest - Bourse Chairman

The government of Bosnia’s Muslim-Croat Federation has sent for approval by parliament a draft plan under which 51% of BH Telecom, Bosnia's biggest telecoms carrier, will be sold to a strategic investor, 10% will be floated on an international bourse and a further 4.0% will be offered to Bosnian citizens on the Sarajevo bourse. The state will keep a 25% stake plus a golden share in the telco, which already trades 10% of its shares on SASE.

The plan also calls for the sale of 11% of the smaller telco HT Mostar to a strategic investor. A stake of 10% will be listed on an international bourse and a further 4.0% stake will be offered to Bosnian citizens on the Sarajevo stock exchange. The government holds 50.1% of the company.

The Muslim-Croat Federation is one of the two autonomous regions of war-divided Bosnia. The other is the Serb Republic.

“The best-case scenario [for this to happen] is by the end of next year,” SASE supervisory board chairman Muris Cicic told SeeNews on the sidelines of the 10th Southeast Europe Economic Forum held in Sofia last week.

“When a decision has been made you need probably another year of preparation, you have to hire a consultant who will get the companies ready for privatisation,” Cicic said.

“The programme of the government is in parliament at the moment so the MPs will decide whether or not to proceed with it,” he added. “There is still public discussion [going on] in Bosnia whether it [the privatisation] should be done or not, and we still don’t know whether parliament will approve the government's plan."

The Prime Minister of Bosnia’s Muslim-Croat Federation, Nedzad Brankovic, told SeeNews last month the region’s parliament was expected to approve a government plan for the sale of BH Telecom later this year and the company could be offered for sale at the beginning of 2009.

Telekom Austria, which has expressed interested in BH Telecom, has urged the government not to delay the privatisation in view of the continuous fall of the comapany's shares on SASE in the past year.

BH Telecom stock was traded down 0.99% at an average price of 29.78 marka ($19.46/15.57 euro) on Wednesday. The stock peaked at 79.12 marka on April 12, 2007.

Cicic said the bourse would prefer to see a bigger package than the planned 4.0% floated on the Sarajevo stock exchange.

“Normally we prefer having more value going through the stock exchange.”

He added that the privatisation of BH Telecom and the smaller HT Mostar will help bolster trade on SASE.

“We will definitely have more trade options and it will definitely contribute to the products we are trading,” Cicic said.

At present shares of BH Telecom are among the most traded on the Sarajevo stock exchange.

Bosnia's third operator, Telekom Srpske, is based in the Serb Republic. Serbia’s state-controlled telco Telekom Srbija acquired a 65% stake in it from the region’s government for 646 million euro in late 2006, when it outbid Telekom Austria at an international tender.

(1 euro = 1.95583 Bosnian marka)