Having indicated earlier that it was not keen to take up its option to acquire another 10 per cent of Greece's OTE, Deutsche Telekom (DT) has now admitted that it was obliged to stand by its commitment if the Greek government used its rights to force DT into purchasing the holding. DT already holds a 30 per cent stake in OTE.
"If the Greek government wants to sell us the stake, it will do so," Andreas Leigers, a DT spokesman, told Bloomberg, adding that there is "no scope for negotiations."
The spokesman made the comments after the Financial Times Deustcheland reported that DT is trying to delay the purchase.
The Greek government issued a statement last month that it was keen to sell its 20 per cent holding in OTE this year in an effort to reduce its huge debt burden. Of note, the agreement it has with DT states that it has the right to sell 10 per cent of OTE to the German company at 15 per cent above the average market price of the past 20 days by the end of 2011.
Observers claim that the value of OTE has been dragged down by its under-performing fixed-line network, and DT will seek reassurance from the government00if forced to acquire the extra 10 per cent stake--to push through extensive reorganisation across the company.
DT senior management has scheduled a series of meetings in Greece for later this month.
Earlier this week the rating agency Moody downgraded OTE's credit rating to Ba1 and left the company on review for a possible further drop. OTE reported first-quarter net profit last week that fell 54 per cent as it took a €40 million charge for cutting 1,600 jobs.
For more:
- see this Bloomberg article
- see the Reuters article
- see the Telecompaper article (sub. req.)
- see this Reuters article
Related Articles:
Report: Deutsche Telekom poised to increase OTE stake
DT, Greek government reach OTE agreement
After AT&T deal, Deutsche Telekom to refocus on Europe
Deutsche Telekom's profits nosedive, down 37% in Q1
Deutsche Telekom's profit dives in Q4, turnaround promised in 2012