Банкеръ Weekly

Briefs

BTC PROFIT GROWTH SLOWS DOWN

The Bulgarian Telecommunications Company (BTC) closed the first nine months of 2004 in a net profit of BGN182.6MN, up from BGN178.3MN for the same period of 2003. Proceeds also rose, by 2%, reaching BGN780MN. Nevertheless, according to BTC's Vice Executive Director Boyko Dimitrachkov, these rates of growth of both proceeds and profit, are slower than in the previous years due to competition, that of mobile phone operators included. Mr. Dimitrachkov made that conclusion at a meeting with the consortium between United Bulgarian Bank (UBB), Bulbrokers, and National Bank of Greece (picked up to sell 34.78% of the telecom's capital against compensation instruments of payment) and owners of such paper. Holders of compensation instruments wonder if they should sell their paper at a profitable price of about 110% of the par value or buy shares in the BTC, trusting to information about its state. In order to orientate them in their choice Mr. Dimitrachkov presented in brief the programme for the company's restructuring in 2005. It projects to considerably reduce the number of personnel, which is currently 24,000 people. In 2004 BTC launched a new system for reporting expenses and sending bills to its clients. The price of telephone services will be calculated in a simpler way. Technologically, the lagging behind in the network's digitalization will be made up for. The old analogue telephone exchanges will be replaced by new ones. Presently, some 30%-35% of subscribers in the country have digital phone lines. The requirements of the European Union (EU) are that they should reach 80% by the beginning of 2008, which means a total of about 2.2 million subscribers. Mr. Dimitrachkov admitted that thousands of citizens in Bulgaria are still waiting for telephone lines to be installed in their homes, promising that the long queue would be cut down by the end of 2005. Subscribers with party lines will steeply decrease. Establishment of the third GSM-network in the country has started and it will be operative within a few months. The privatisation of 34.78% of BTC's capital started on January 27 and will continue till February 18 or until the stocks are sold out. The minimum selling price per share will be BGN100 in compensation instruments of payment. The telecom's paper could be purchased as well by holders of housing receipts (given to owners of long-time saving deposits for the purpose of buying flats). The telecom's paper will be sold by the above-mentioned consortium between UBB, National Bank of Greece, and Bulbrokers. Purchase bids - limited and market - will be received from 10.00 hrs. to 11.000 hrs. on the day of the tender. In the case of limited bids the buyer specifies the highest price he is ready to pay per share. In the case of market bids no price is specified, but the number of stock the player wants to purchase. The bids will be rated according to limited price and time of submission. A minimum price for rating will be set as well under which limited bids won't be taken into account. Bids can be submitted to the offices of all licensed investment underwriters and in UBB's branches in the entire country. In order to take part in the auctions holders of compensation instruments need a certificate, a personal identity card, and a document verifying the registration of their paper into their accounts. This procedure may take several days.

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