Ukraine is negotiating a major loan with the European Bank for Reconstruction and Development to help launch the privatization of giant state phone monopoly Ukrtelekom, a senior government official said on Jan. 18.
State Communications Committee chief Oleh Shevhuk, who visited London Jan. 12-15, said the government had reached agreement with the EBRD on a credit package for Ukrtelekom. However, Shevchuk said talks with the bank are still in progress and the size of the loan is now ‘confidential.’
‘We’re talking about a sum of money larger than any the EBRD has ever before granted to a country for a telecommunications projects,’ he said.
The EBRD’s Ukraine director, Yuri Poluneyev, said the funds will be used to improve and diversify Ukrtelekom’s services and improve the effectiveness of the company’s management. This will increase the company’s privatization value, Poluneyev said.
He said the EBRD may allow Ukrtelekom to repay the loan in company shares after privatization. Both sides are also considering other methods of repayment, he said.
Shevchuk also announced that the government has chosen six companies – out of more than 30 proposed by the EBRD – to participate in a tender to advise the government on regulatory reform in the telecommunications industry. He said the winner of the tender will be chosen within 45 days.
Poluneyev said that the six are ‘big, experienced international companies.’
Last month, the government took its first concrete steps toward privatizing Ukrtelekom, transforming it into a commercial entity.
Ukrtelekom is the lynchpin of Ukraine’s plan to drastically increase privatization revenues in 2000 in the face of massive foreign debt payments.
