Telco case rumbles on

July 30, 2011 | 13:57
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A stake purchase deal between telecom giant FPT and state-owned EVNTelecom is labouring on.

The stock deal with EVNTelecom caused FPT serious headaches, said FPT’s chief executive officer (CEO) Truong Dinh Anh.

Anh said the group was under negotiations with EVNTelecom’s parent company- Electricity of Vietnam (EVN)- to take back the VND708 billion ($34.2 million) deposit  relevant to the deal.

“The deposit could not be lost, but we hope to soon take back the amount,” said Anh.

Both sides are reportedly waiting for a final decision from the prime minister.

In October 2010, FPT and EVN inked an agreement under which the electricity group sold 60 per cent stake in one of its affiliates, EVNTelecom, to the telecom group.

However, later the prime minister issued documents allowing EVN to sell a maximum 49 per cent stake in EVNTelecom to the telecom group only. The signed agreement between EVN and FPT then did not conform to the prime minister decision.

Besides, in light of governmental Decree 25/2011/ND-CP dated April 6, 2011 and effective from June 1, 2011 an individual or organisation owning over 20 per cent chartered capital or stocks of a telecom firm is illegible to hold more than 20 per cent stake in another telco offering the same services.

In fact, if FPT holds a 43 per cent stake in FPT telecom, it then cannot own over 20 per cent stake in another telco like EVNTelecom under existing regulations.

After the deal with FPT was dropped, EVNTelecom reportedly could not close two other similar deals, one with local firm and the other with a Singapore-based partner.

Dropped deals made EVNTelecom incur delays in its efforts to expand 3G network infrastructure.

According to EVNTelecom’s investment construction deputy director Nguyen Hai Ha, if the stock sale deals were successful, the firm’s plan to develop 7,500 3G base transceiver stations in late 2011 might be finalised.

“3G network infrastructure incurred delays due to the firm’s slow pace of equitisation,” Ha said, adding that the Ministry of Industry and Trade demanded EVNTelecom to sell 25 per cent stake to a strategic partner before making its initial public offering.

In 2011’s first half, telecom group FPT reported revenue of around VND12.2 trillion ($589 million), up 22 per cent year-on-year and exceeding the projection. Its pre-tax profits came to VND1.2 trillion ($58.1 million), up 11 per cent against corresponding period in 2010. The earnings-per-share was VND3,682/share.

By Duc Huy

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