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EBRD taps into Poland's national telecommunications network
The European Bank for Reconstruction and Development (EBRD) has invested US$ 75.5 million (ECU 64.8 million) in the Initial Public Offering (IPO) of Telekomunikacja Polska S.A. (TPSA). The EBRD’s investment represents 8.1 per cent of the shares sold by the Polish Treasury in the IPO and 1.21 per cent of TPSA’s share capital. The IPO of TPSA will significantly increase the liquidity and depth of the Polish equity capital market, nearly doubling the market capitalisation of the Warsaw Stock Exchange. It is also expected to improve Poland’s access to international financial markets and attract new sources of finance to the country, thereby increasing investments, in particular in the telecommunications sector, and accelerating economic development.
"As a large financial investor in the company, the EBRD will seek to be an active minority shareholder in TPSA and it intends to support the management’s objective of transforming the company into a modern, privately-run, customer-oriented and efficient telecommunications operator," said Peter Reiniger, Director of the EBRD Telecommunications Team. "Through its investment, the Bank is also expressing its confidence in the Polish telecom market and the Polish economy as a whole." The Polish Government recently announced that it would seek a strategic partner for between 25 per cent and 35 per cent of TPSA as part of the second stage of its privatisation.
Alain Pilloux, Director of the EBRD's Poland Team, added: "This is the first Initial Public Offering in the region since the Russian crisis and one of the largest in central and eastern Europe to date. This transaction demonstrates the Polish Government’s commitment to economic reform, and in particular its firm intention to liberalise and privatise the telecommunications sector."
TPSA is a joint-stock company established in 1991. It is the principal provider of telecoms services in Poland and offers a wide range of services, including basic voice services, leased lines, internet access, data transmission, radio communication, mobile telephony and other telecoms value-added services. It also sells telecoms equipment and produces fibre optic cable and magnetic cards. With 7.5 million subscribers at the end of 1997, TPSA controlled 98 per cent of the local fixed-line market. It provides domestic long distance services, where competition is to be to be introduced in 1999, and international long distance services, where its monopoly is expected to be maintained until 31 December 2002. TPSA installed 2.5 million new lines over the last three years.
TPSA is the EBRD’s 42nd telecommunications project, taking the Bank’s signed commitments in this sector above ECU 1.05 billion. In total, the Bank has mobilised close to ECU 6 billion in finance to the telecommunications sector in the region. Projects include the modernisation and privatisation of Matav (the Bank holds a 1.97 per cent equity interest in the company), the expansion of Romania’s state-owned telecoms company Rom Telecom (which has recently been privatised, with the sale of a 35 per cent stake to the Greek Telecommunications Company, OTE), as well as assistance to the telecommunications sector in Bosnia and Herzegovina, Belarus, FYR Macedonia, Albania, Bulgaria, Moldova, Russia, the Slovak Republic, Slovenia, Kyrgyzstan and Ukraine.
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