Government to Make $79.9 Million from ArmenTel Sale

YEREVAN (Noyan Tapan)–Armenia’s government will get $79.9 million as a result of Armentel’s privatization–Prime Minister advisor Vahram Avanessian said.

Avanessian reported at a news conference Tuesday that following an agreement signed between the Greek OTE company and Armentel’s shareholders–Armentel’s price was set at $205 million–while its debt was $46.7 million. 90 percent of the shares were sold out.

Of the whole sum–Armenia will get $79.9 million–including $27.5 million as a result of shareholder TWT’s debt to Armenia’s Government–including the company "Telephone net of Armenia" as part of Armentel–while TWT will get $62 million.

It was reported at the news conference attended by Armenia’s Minister of Communication–Grigor Pokhpatian–that Armentel will become a monopoly for 15 years in Armenia. This monopoly does not spread on the internal computer nets and the satellite communication.

Armentel will be working following a licensed agreement signed between Armenia’s Government and the OTE company. The agreement suggests that the tariff for telephone users among the population will be maintained on the level it is now until Jan. of 1999–after which it will be raised up to $1.70 per month.

From now on–the tariff will depend on inflation only. For other abonents–starting from Jan. 1998–the tariff will be set at $5.

Avanessian noted that the government will use part of the sum to cover the budget deficit. He added that ways of using the sum had not yet been discussed.

Among the conditions of the deal was that the OTE company pledges to invest no less than $300 million under development of telecommunication in Armenia within the next 10 years. Of that sum–$100 millions will be invested within the next two years–the other $100 millions in 5 years.

According to Avanessian–the selling of Armentel–which came as the first attempt of international privatization in Armenia–was a rather successful deal. The deal involved four big consulting companies of the world–led by American Merill Lynch International.

"If the deal was a failure–we could expect that other similar deals would fail as well," Pokhpatian said.

Armenia’s Government announced international tender for several more enterprises–including the Yerevan Brandy Factory and the Mars enterprise producing electronic equipment.


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