Norway government abandons right to reduce Telenor stake

FILE PHOTO: Telenor's logo is seen in central Belgrade, Serbia, March 21, 2018. REUTERS/Marko Djurica

OSLO (Reuters) - Norway's center-right government will give up its right to sell up to 20% of telecoms operator Telenor TEL.OL, the country's third largest listed company, the Ministry of Trade and Industry said on Friday.

Parliament authorized a plan in 2015 to allow the government to reduce its 54% stake to 34%.

“The authorization has not been utilized and, based on an overall assessment, the government sees no need to extend it,” Minister of Trade and Industry Torbjoern Roe Isaksen said.

“The state’s rationale for its ownership of Telenor is to maintain a leading technological and industrial company with head office functions in Norway. The state’s goal as an owner is the highest possible return over time,” he added.

The government argued in 2015 that having permission to cut its stake in Telenor could make it easier for the company to conduct mergers and acquisitions.

Telenor is Norway's third-largest listed firm after oil producer Equinor EQNR.OL and bank DNB DNB.OL. It has 183 million customers in nine countries across the Nordics and Asia.

The government is also top shareholder in Equinor and DNB as well as in metals maker Norsk Hydro NHY.OL, fertilizer producer Yara YAR.OL and weapons group Kongsberg KOG.OL. The ministry said it will not seek any new permissions to sell these shares, either.

In the event that one of the groups proposes a merger or acquisition that could affect the state’s ownership, the government would seek parliament’s approval before any deal was done, it said.

The government is due to present its annual white paper on state ownership on Friday.

Reporting by Terje Solsvik; editing by Alex Richardson and Jason Neely