WASHINGTON, D.C., May 13, 1998— The International
Finance Corporation has signed an investment agreement to support the forthcoming
privatization of the Former Yugoslav Republic of Macedonia’s state-owned
telecommunications company, A.D. Makedonski Telekomunikacci – Skopje (MT).
The transaction will help finance MT’s expansion and modernization program
and is aimed at being a model for future divestitures of other large state-owned
enterprises in the country.
IFC will subscribe to US$25 million of convertible MT bonds for its own
account and subscribe to up to US$25 million more of the bonds for the
account of participant institutions. The bonds are expected to be
converted into common shares when the company is privatized.
MT is the first of the country’s large state-owned enterprises to be privatized.
An international competitive bidding is being prepared under which at least
a 33.3 percent stake carrying management control will be sold to an international
telecommunications company. Selection of the strategic investor is expected
by the end of the year. A consortium headed by CIBC World Markets is advising
the government in this transaction.
MT plans to use the IFC financing package to continue to improve service
quality and its network in order to satisfy unmet demand for communications
services. Its existing network of 408,000 lines for a population
of approximately 2 million (representing a penetration of 20.5 lines per
100 people) is much lower than those of most other Central and Eastern
European countries. The 1998 portion of the company’s investment
program has an estimated total cost of US$75 million.
"We are very pleased to welcome IFC as an investor," said Minister
of Transport and Communication Abdulmenaf Bexheti. "The commitment
of such a prestigious international institution further bolsters the economic
reform being championed by the Government. We expect other international
investors to follow IFC’s lead."
Mr. Declan Duff, Director of IFC’s Telecommunications, Transportation
and Utilities Department, said that FYR Macedonia is taking major steps
to liberalize and privatize its telecommunications sector. An important
part of this process, he added, was the opening of MT to participation
of a strategic investor that can bring not only capital but enhanced management
capacity, improved customer services and marketing, and other skills to
help the company achieve international efficiency standards.
Kiron Sarkar, European Head of Telecoms, Investment Banking at CIBC World
Markets, said the pre-privatization financing represented a major step
forward in the privatization of MT. He said it demonstrated the confidence
the international financial community had in FYR Macedonia and the attractiveness
of MT as an investment opportunity.
IFC, a member of the World Bank Group, fosters economic growth in the developing
world by financing private sector investments, mobilizing capital in the
international financial markets and providing technical assistance and
advice to governments and businesses.