UPDATE 1-Slovenia hopes to attract Deutsche Telekom, others in Telekom sale
FRANKFURT Dec 12 (Reuters) - Slovenia is hoping to attract interest from Deutsche Telekom, Telenor and other telecoms groups in a sale of a stake in its biggest telecom group Telekom, part of efforts to raise money to avoid an international bailout.
State-owned investment fund SOD, which is coordinating the sale with the government, has hired Citi to organise the sale of a roughly 75 percent stake, two people familiar with the deal said.
"Deutsche Telekom and Telenor, which have a clear focus on Eastern Europe, are expected to look at the asset," one of the sources said. Other telecoms companies and private-equity groups may join the race, the source said.
Private-equity groups which lost out in the auction of Serbian cable operator SBB are likely to look at Telekom Slovenije now, the person said. Buyout groups Cinven and Providence were among the contenders for SBB, which was bought by KKR in October.
Proceeds from the Telekom sale would help Slovenia, which was badly hit by the global financial crisis. The government expects that recapitalising Slovenian banks will cost 4.8 billion euros. The government said on Thursday it would raise this itself to avoid becoming the latest euro zone country to need a bailout.
Telekom Slovenije's market capitalisation is 790 million euros ($1.1 billion). In its home market - it is also active in some other Balkan countries - it has 2.1 million mobile phone customers, giving it a 50 percent share of the market for mobile services, ahead of rivals Simobil, with 30 percent, and Tusmobil, with 11 percent.
It is also by far the dominant fixed-line provider at home.
In the first half of 2013, Telekom Slovenije's revenues were flat at about 400 million euros. Earnings before interest, taxes, depreciation and amortisation slipped 5 percent to 126 million euros.
Telekom is the largest of 15 firms that the Slovenian government earmarked for sale in May.
The government's SOD investment fund said Citigroup would propose the mode and timing for the sale and invite potential bidders.
"The process will be transparent and competitive ... but SOD is not providing detailed information about the sale," the fund said in an emailed response to Reuters.
The Slovenian government, Deutsche Telekom and Cinven declined to comment. Telenor and Providence were not immediately available for comment.