Cabinet moves Ukrtelecom privatization forward

Ukraine’s Cabinet of Ministers approved a resolution on September 27 to transfer the government’s 92.79% stake in Ukrtelecom (UTLM UK) to the State Property Fund to be privatized, according to an announcement posted on the Cabinet’s website yesterday. Prime Minister Mykola Azarov said yesterday at a press conference that he hoped the sale could take place by the end of 2010. SPF Head Oleksandr Ryabchenko said the government expected to get at least UAH 12 mln for the stake. Brad Wells: We take a cautious view on Ukrtelecom privatization news. The company has been on the schedule to be sold by various governments since the 90s. However, we note that parties rumored to be interested in the fixed-line telecom operator include business groups that are viewed as close to the Party of Regions, which controls the government, and telecom operators in Russia, with whom the government has beefed up both political and economic ties since coming to power in March. Thus, we do not rule out that the government already has a potential deal in mind and speed up the timing to make it happen by year-end. According to current legislation, the SPF must announce conditions for a privatization auction 75 days beforehand, thus a sale could theoretically still be possible.