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UPDATE 1-Kosovo cancels sale of state telecoms company
December 31, 2013 / 6:48 PM / 4 years ago

UPDATE 1-Kosovo cancels sale of state telecoms company

* Telecom sale fails for a second time

* German-U.S. consortium to consider legal action

* Parliament did not muster quorum to vote on deal (Adds company reaction, more details)

By Fatos Bytyci

PRISTINA, Dec 31 (Reuters) - Kosovo cancelled the sale of its state owned telecom company PTK after failing to win parliamentary support for the deal, in a move that may further jeopardise the country’s efforts to attract foreign investors.

Parliament did not muster a quorum last week to vote on the sale because of resistance by some deputies from Prime Minister Hashim Thaci’s ruling coalition and by opposition members, who argued the deal undervalued 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 million) for control of PTK in April.

A deadline to sign the deal expired on Dec. 30.

A previous attempt to sell PTK had collapsed in 2011 after corruption charges were filed against a number of senior company officials, who were all later cleared in court.

“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.

ACP Axos Capital and Najafi Companies said this decision “is totally unacceptable by any standards and has significant legal, commercial, economic and financial consequences.”

“We will consider undertaking all necessary actions including legal proceedings according to applicable international laws to protect our interests and rights,” Axos said in an emailed statement.

The failed sale threatens further to undermine Kosovo’s efforts to attract foreign investors, who are often put off by its reputation for organised crime and corruption and by tensions between the Albanian majority and the Serb minority.

Kosovo is ranked 111 on Transparency International’s graft perception index, on a par with Ethiopia and Tanzania.

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 proposed sale did not included its postal arm.

Analysts say the privatisation is hostage to a power struggle within Thaci’s Democratic Party of Kosovo, which has caused him to lose a number of votes in parliament in recent months. (Reporting by Fatos Bytyci; Editing by Anthony Barker)

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