Press Releases


Brigid Janssen
Phone: (202) 458-4698
Fax: (202) 974-4384

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.