Agreement on setting up new Mobi 63 company signed

Serbian Minister of Finance Mladjan Dinkic said the government gave consent to the agreement signed with the consortium of Austrian businessmen, led by Martin Schlaff, on establishing a joint telecommunications company Mobi 63, where Serbia owns 70% and Austrian investors 30% of the company capital.

At a press conference following the signing ceremony, Dinkic explained the agreement comprises 14 documents and stressed that one of the conditions for setting up Mobi 63 was that the Austrians pay out dividends of 2.1 billion dinars, or €34 million, since they bought a portion of Mobtel from the previous owner, BK Trade.

He said that the agreement came following the agreement between Serbian telecommunication and postal company PTT Srbija and Mobtel on one side and the Austrian consortium and Mobtel on the other, as PTT Srbija took over the company’s €91.3 million claims from Hypo Alpe-Adria Bank and Raiffeisenbank with the right to pledge the equipment used by Mobtel. PTT Srbija therefore became the owner of all Mobtel’s equipment.

Dinkic announced that the licence for the other mobile operator, as well as Mobtel’s equipment and the user subscription database will be publicly auctioned, and the entire process should be concluded by end-July.

In order to participate the auction, the potential owner will have to be a telecommunications company with good reputation and more than three million users, as well as a 2005 turnover of over €500 million, he added. Preparations for the auction will be carried out by the Telecommunications Agency and the Privatisation Agency and will be completed by the end of April, the Minister said.

According to Dinkic, the initial price agreed on today will stand at €800 million, €320 million alone will go for the licence. When the state sells its share in the company, it should generate revenues of at least €680 million, which is 82% of the total price that will be attained if the transaction is made at the initial price.

The Austrian investors, who will be small shareholders in the mobile operator, will have the right to decide whether to sell their share if the auction price is less than €1.1 billion, Dinkic said but added that they will be obliged to sell their shares if the price is larger than this sum.

Dinkic said that the Austrian consortium also pledged to place a €96 million deposit to be paid to the best bidder in the tender if the consortium decides not to sell its stake.

Also, one of the conditions in the public tender will be that the winner takes over all Mobtel employees, Dinkic said and warned that Telekom Srbija continues to administrate all jobs related to the 063 mobile network by the end of the tender, Dinkic said. The transaction concluded today will bring over €20 million in value added tax (VAT) into the Serbian budget, the Minister of Finance said.

Dinkic pointed out that this agreement solves the 13 disputes before domestic and international courts, including the arbitration dispute in Zurich and the charges for licence confiscation.

As for PTT, the government agreed to pay €91.3 million to the company and a further €8 million to PTT employees for voluntary pension fund, Dinkic said and added that PTT’s equipment will thus become the property of the Republic of Serbia.

According to Dinkic, following the conclusion of these agreements, the two transactions alone will bring between €1.3 billion and €1.5 billion in privatisation revenues.

Martin Schlaff expressed satisfaction with today’s agreements and pointed out that a very complicated situation was solved to the benefit of all.