December 31, 2013 / 12:27 PM / in 4 years

Kosovo ends sale of state telecoms company

PRISTINA, Dec 31 (Reuters) - Kosovo has canceled the sale of its state owned telecom company after it failed to win parliamentary support for the deal, in a move that will jeopardize the Balkan country’s efforts to attract foreign investors.

The decision came after parliament failed to vote last week on the sale following resistance from a number of deputies from the ruling coalition of Prime Minister Hashim Thaci, as well as opposition member of parliament, who have argued the deal undervalues Kosovo’s most profitable company.

An international consortium comprising Germany’s ACP Axos Capital Gmbh and U.S.-based investor Najafi Companies offered 277 million euros ($382.66 million) for control of PTK in April. The deadline to sign the deal ended Dec. 30.

A previous attempt to sell PTK collapsed in 2011 after corruption charges were filed against a number of senior company officials.

The saga has threatened Kosovo’s efforts to attract foreign investors, who are often put off by its reputation for deep-rooted organised crime and corruption, as well as tensions between the Albanian majority and Serb minority.

“Facing this situation we are unable to proceed with the signing of the contract for the sale of shares of the PTK and the commission has decided to cancel the privatization of the 75 percent of the shares,” Kosovo’s economy ministry said in a statement, without giving details on future plans for PTK.

There was no immediate reaction from ACP Axos Capital and Najafi Companies, who have previously said they will sue the government if the sale fails.

PTK, which competes with a division of Slovenia Telekom, has more than 1 million mobile subscribers, another 100,000 landline customers and provides internet and cable TV services. The sale does not include its postal arm. ($1 = 0.7239 euros) (Reporting by Fatos Bytyci; Editing by Louise Heavens)

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