April 21, 2015 / 11:07 AM / 4 years ago

Slovakia aims to raise up to $1.1 billionfrom Telekom IPO

BRATISLAVA (Reuters) - Slovakia launched a public offering of its 49 percent stake in former monopoly Slovak Telekom (DTEGn.DE) on Tuesday, looking to raise up to 1 billion euros ($1.1 billion) from the sale.

The price range for the initial public offering (IPO) was set at 17.7-23.6 euros per share, confirming a Reuters report from Friday, valuing the company at 1.5-2 billion euros, Slovak Telekom said.

The company, majority-owned by Deutsche Telekom, said the offer for institutional investors would start on Tuesday and close on May 6. For retail investors, it begins on April 22.

The issue will be marketed on a roadshow with stops including Germany, the United Kingdom, the United States and Poland, said Branislav Bacik, head of the Slovak government agency managing state assets.

Slovakia plans to list its stake on the illiquid Bratislava market as well as the London Stock Exchange. The London listing will be in the form of global depositary receipts (GDRs). Shares will also be traded on the Prague Stock Exchange.

Deutsche Telekom (DTEGn.DE) is not selling any of its 51 percent stake.

Slovak Telekom is the main player in the fixed-line market and No. 2 mobile operator in the euro zone country of 5.5 million people, behind Orange (ORAN.PA), and ahead of O2 Slovakia (SPTT.PR).

The fourth fully-fledged mobile operator, a newcomer to the market, is closely-held SWAN. Slovak Telekom has a 33 percent mobile market share by sales, its IPO prospectus said.

Pricing and allocations are expected to be announced on May 7 and the first trading day will be May 12. Up to 10 percent of the offer is expected to go to Slovak and Czech retail investors.

Citigroup (C.N) and J.P. Morgan (JPM.N) are joint global coordinators and joint bookrunners of the offering, while Erste Group (ERST.VI) and Wood & Co. are joint lead managers.

The offering, if priced within the range, would raise between 750 million and 1 billion euros for the Slovak state.

The government is debating whether to use the proceeds to try to increase its stake in electricity producer Slovenske Elektrarne, in which it holds 34 percent. Italy’s Enel (ENEI.MI) is planning to sell its 66 percent holding.

Slovak Telekom reported 2014 earnings before interest, tax, depreciation and amortization (EBITDA) of 310.7 million euros on sales of 767.6 million.

It had 93.1 million in cash and cash equivalents at the end of 2014 and 219.6 million in term deposits. It was also owed 150 million by its parent firm, in a loan due in May this year. Its short-term assets include 172 million in executable investments as well.

Telekom paid out a dividend of 80 percent of net profit for last year, or 32.5 million euros, the prospectus said. In the coming years, it will pay out 50-80 percent of distributable profit, but any payout will depend on its overall condition and financing needs.

($1 = 0.9341 euros)

Additional reporting by Jan Lopatka and Robert Muller in Prague; Editing by Pravin Char and Mark Potter

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