Ukrainian National Telecommunications Operator Ukrtelecom Sold to an Austrian Investment Company

KYIV, Ukraine, March 15, 2011 /PRNewswire/ -- Ukraine's State Property fund (SPF) has signed an agreement to sell the largest state-owned telecommunications operator Ukrtelecom to ESU LLC, a Ukrainian subsidiary of Austrian EPIC Concern. 92.79 percent of the telecommunications giant was sold for approximately USD 1.3 billion.

The selling of Ukrtelecom became the biggest privatisation deal made so far by the government of President Viktor Yanukovych, according to Reuters.

Earlier, Peter Goldscheider, one of EPIC's managing partners, commented that this is a long-term investment and that his Vienna-based privatization and investment company potentially plans to attract strategic investors andlaunchthe initial public offering (IPO).It has been also reported that along with the price of the agreement, the buyer adopted responsibility to repay Ukrtelecom's loans (approx. USD 160million and UAH 3.7 billion) and carry out a number of investment commitments.

Last year,the SPF announced bidding for the privatization of 92.79 percent of the Ukrtelecomstocks. The ESU LLC, EPIC's Ukrainian subsidiary was the only bidder, hence the auction has been cancelled. Following the independent assessment of Ukrtelecom by a Ukraine-based consulting company Ostrov, Ukraine offered EPIC the direct sale for UAH 10.575 billion (approx. USD 1.3 billion) and the offer has been accepted.

Ukrtelecom is a modern telecommunications company with developed infrastructure that includes 33 branch offices and 373 departments. As of today, Ukrtelecom controls about 80 percent of Ukraine's fixed-line market and has a small mobile business Utelproviding services to more than 630,000 customers.Currently, Ukrtelecom possesses a license to provide UMTS/WCDMA and 3G mobile services. In addition, Ukrtelecom has created the most powerful high-capacity national data trunk network in Ukraine based on the modern DWDM technology, with 4 GBits/sec transfer capacity.

The private Austrian investment company EPIC was founded in 1991 to provide consulting and investment services for conducting privatizations in Central and Eastern Europe.