The Slovak government launched a public offering of its 49 percent stake in former monopoly Slovak Telekom on 21 April and is seeking to raise up to EUR 1 billion, reports Reuters. The price range for the initial public offering (IPO) was set at EUR 17.70 - 23.60 per share. Slovak Telekom, which is majority-owned by Deutsche Telekom, said the offer for institutional investors would start on 21 April and close on 06 May. For retail investors, it begins on 22 April.
The issue will be marketed at a roadshow with stops including Germany, the UK, the US and Poland, said Branislav Bacik, head of the Slovak government agency managing state assets. The Slovak government plans to list its stake on the illiquid Bratislava market as well as the London Stock Exchange. The London listing will be in the form of global depositary receipts (GDRs). Shares will also be traded on the Prague Stock Exchange. Deutsche Telekom is not selling any of its 51 percent stake.
Slovak Telekom is the main player in the fixed-line market and second largest mobile operator in the euro-zone country of 5.5 million people, behind Orange Slovakia, and ahead of O2 Slovakia. The fourth mobile operator, a newcomer, is closely-held Swan. Slovak Telekom has a 33 percent mobile market share by sales, its IPO prospectus said.
Pricing and allocations are expected to be announced on 07 May and the first trading day will be 12 May. Up to 10 percent of the offer is expected to go to Slovak and Czech retail investors. Citigroup and JP Morgan are joint global coordinators and joint bookrunners of the offering, while Erste Group and Wood & Co. are joint lead managers.
The offering, if priced within the range, would raise between EUR 750 million and 1 billion for the Slovak state. The government is debating whether to use the proceeds to try to increase its stake in electricity producer Slovenske Elektrarne, in which it holds 34 percent. Italy's Enel is planning to sell its 66 percent holding.
Slovak Telekom reported 2014 EBITDA of EUR 310.7 million on sales of EUR 767.6 million. It had EUR 93.1 million in cash and cash equivalents at the end of 2014 and EUR 219.6 million in term deposits. It was also owed EUR 150 million by its parent firm, in a loan due in May this year. Its short-term assets include EUR 172 million in executable investments as well.
Slovak Telekom paid out a dividend of 80 percent of net profit for 2014. or EUR 32.5 million, the prospectus said. In the coming years, it will pay out 50 - 80 percent of distributable profit, but any payout will depend on its overall condition and financing needs.
