April 16 (SeeNews) - International private equity firm Cinven said on Thursday it has made a binding offer for the Slovenian government's stake in Telekom Slovenije [LJE:TLSG].
On Monday, state holding company SDH, which is coordinating the sale process for a 72.75% stake in the incumbent telco, said a single binding bid had been handed in after the expiry of the relevant deadline.
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Cinven said in a statement its intentions for Telekom Slovenije are to invest significantly to upgrade the network, to stop the company's revenue decline, stabilise and then grow revenues sustainably for the long term.
The equity fund said it is engaged in a dialogue with the SDH and their advisors to discuss its offer and is looking forward to concluding a transaction on mutually agreeable terms.
Cinven said it plans to increase substantially the investment in fibre optic networks, in order to offer high-speed broadband across Telekom Slovenije’s fixed network and to increase Telekom Slovenije’s 4G coverage on its mobile network with a target to cover 90% of the population.
Investments are also planned in the sales channels and customer service of Telekom Slovenije - which has a market capitalization of 798 million euro ($849 million), to reverse its decline in market share in recent years.
Telekom Slovenije's consolidated net profit dropped to 1.6 million euro in 2014 from 51.1 million euro a year earlier due to the effects from one-off events. Consolidated revenues fell 3% to 756.5 million euro last year. The telco targets a consolidated net profit of 66 million euro for 2015.
According to the company's annual statement for 2014, its share on the mobile services segment fell 0.8 percentage points to 48.4% while its mobile subscribers edged up 0.1% to 1.13 million. Slovenia has a population of around 2 million.
In 2013, Telekom Slovenije was placed on a list of 15 state firms earmarked for privatization.
Cinven, set up in 1977, has offices in Guernsey, London, Frankfurt, Paris, Milan, Luxembourg and Hong Kong.
($=0.9398 euro)