April 24, 2018 / 3:24 PM / 4 months ago

Kosovo will not bail out state telecoms firm, economy minister says

PRISTINA, April 24 (Reuters) - Kosovo has no plans to bail out state-owned telecoms firm PTK, the economy minister said on Tuesday, urging the company to cut costs - including salaries - to avoid bankruptcy.

Once the most profitable company in the Balkan country, PTK has been in red since 2015 due to inefficiencies and rising competition from No.2 mobile operator IPKO, owned by Telekom Slovenije.

Economy minister Valdrin Lluka told Reuters the government was unlikely to provide the 60 million euros ($73 million) PTK owes to creditors.

He said the government would soon start talks aimed at finding a solution for PTK, which he said was in “free fall.”

“I would not like to see people losing their jobs, but I would like to see them (PTK) cut operational cost and that includes wages as well.”

The average wage of PTK’s around 2,300 employees is about 1,000 euros per month, compared with around 420 euros a month for other public sector workers such as doctors and teachers.

PTK reported a 4 million euro loss for the first three months of this year. It has not published figures for 2017, but its 2016 loss was estimated at 50 million euros.

Lluka said the government could privatise the company in two years, once it has returned to profit.

His comments come after PTK board member Besa Shatri-Berisha warned the government on Monday it could lose ownership of the company to creditors. She added PTK could face bankruptcy within the next year.

In May last year, PTK managed to avoid bankruptcy after privately-owned mobile operator Z-mobile agreed to waive a 32 million euro fine imposed by an arbitration court in London over a breach of contract.

The government may also have to pay up to 400 million euros in compensation in another arbitration court case, after it failed to win parliamentary approval for a plan to sell PTK to Germany’s ACP Axos Capital Gmbh for 277 million euros in 2013.

$1 = 0.8185 euros Reporting by Fatos Bytyci; Editing by Mark Potter

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