August 4 (SeeNews) - Slovenian state holding company SDH, which is coordinating the privatization process in the country, said on Tuesday it has been notified by UK private equity fund Cinven, the sole bidder for the purchase of a 72.75% stake in Telekom Slovenije, that it no longer wishes to continue negotiations for the conclusion of the sale process.
Cinven said that taking into account a number of important events that have occurred since its June offer for the Telekom Slovenije stake, the transaction is no longer economically viable, SDH said in a statement.
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The reasons for Cinven's withdrawal from the process quoted in its notification to SDH include a regulatory environment in Slovenia that does not encourage investment as well as unfavorable changes in EU rules on international roaming. The difficult situation on financial markets is increasing funding costs, which is negatively affecting the entire process, Cinven also told SDH.
The equity fund was also concerned about the very uncertain business environment in which Telekom Slovenije operates and about the complexity of the political environment in Slovenia.
In April, SDH said a single binding bid had been handed in for the sale of the stake in the incumbent telco. Cinven later confirmed it had placed the offer.
In June, Cinven said a solution to deal with the uncertainty around the merger of the Telekom Slovenije's Macedonian operations could not be agreed with SDH but noted it remained interested in the privatization deal and was open to re-evaluate the situation once the outcome of Macedonia is clarified.
In October, Telekom Slovenije - which operates as a fixed and mobile services provider in Slovenia, Bosnia, Kosovo and Macedonia, and Telekom Austria Group said they had agreed to merge their Macedonian units.
In July, the Macedonian competition authority cleared the planned merger with the closing of the transaction expected in the last quarter of 2015. After the regulatory nod was granted, Telekom Slovenije said the last condition in the process of selling the majority stake in the company had been fulfilled.
In 2013, Telekom Slovenije - which had a market capitalization of 614 million euro ($674 million) as of the trading close on the Ljubljana bourse on Tuesday, was placed on a list of 15 state firms earmarked for privatization.
($=0.9114 euro)