ATHENS (Dow Jones Newswires)–Greece’s Hellenic Telecommunications Organization–or OTE–is all set to launch as planned a global offering and the listing of its shares at the New York Stock Exchange next month–but awaits a go-ahead from the government to proceed–company officials said Monday.
The officials said the company is ready to submit its pink herring–a preliminary prospectus–to the Securities and Exchange Commission. A premarketing period also opens Monday and will last through Oct. 17–while roadshows are scheduled to take place between Oct. 12 to 30.
OTE purchased 90 percent controlling interest in Armenia’s ArmenTel last year.
"What needs to be done from our part for entry at NYSE–it has been done–and most probably we’re heading for listing on Nov. 2," a senior company official said. "From there on–it’s up to the government and the international market conditions if they will let us go ahead."
So far the government has indicated that it doesn’t wish to postpone the scheduled offering of a 15 percent tranche of its OTE stake. But the unfavorable market environment and the company’s declining share price have put at stake the flotation–from which the government hopes to raise some 300 billion drachmas.
Officials acknowledged that the adverse market conditions are weighing against the move and didn’t rule out a last-minute reduction of the offered stake. About 25 percent of OTE’s take is already listed at the Athens and London stock exchanges.
OTE’s Managing Director George Chryssolouris is expected to give his proposal on whether the offering should proceed around Oct. 10.
Officials involved in the privatization said a number of factors serve as reasons to go ahead. They said that despite the market turmoil–telecommunications stocks have performed relatively well during the crisis; the Greek market has also behaved better than other emerging markets; and OTE has a remarkable growth potential that could attract investors–due to the increased digitization of Greek telecommunications.
Digitization has increased by 20 percent over the past nine months to reach 63 percent of the total network.
The company also plans to reorganize its personnel in order to get new skilled employees while reducing its aged staff through an early retirement program.
OTE’s laggard–its mobile phone operator Cosmote–is also seen on a recovery path–the officials said. Mobile communications is the only field in which OTE–a state monopoly–faces competition–as there are already two private operators–Panafon and Stet Hellas.
After a sluggish start last year–Cosmote is expected to have more than 200,000 subscribers by the end of 1998 and expand its network throughout Greece by next June.
"The fundamentals are good. Financial consultants so far tell us to go ahead," one official said. "But the decision will not be made until the last minute."