Eesti Telekom
Estonian state to accept the cash offer for Eesti Telekom shares
Eesti Telekom / 23.09.2009 Dissemination of a Adhoc News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- The Government of Estonia has in principle decided to sell its holding in AS Eesti Telekom. The Minister of Finance will formally propose the Government meeting on Thursday to accept TeliaSonera's cash offer of EEK 93 per each Eesti Telekom share, provided the company pays out extraordinary dividends of approximately EEK 7 per this year and agrees to pay out 100 percent of the retained earnings of preceding year during the next three years. According to Mr Jürgen Ligi, Estonian Minister of Finance, the rationale for the transaction was thoroughly assessed. 'We used an international advisor, who, applying a range of methods, assessed the offer in relation to the fair value of the shares. Another consideration was the impact on the fiscal balance and in that respect the agreement reached to pay extraordinary dividends this year and maximum dividends during the next three years is of utmost importance to us,' said Minister Jürgen Ligi. 'The state has no strategic interest in having a holding in one of the telecommunications companies, in fact the holding is at odds with the role of the government as a regulator and supervisor of fair competition.' Including the shares to be recalled from the Estonian Development Fund, the state would receive a little more than EEK 4 billion from the cash offer, extraordinary dividends and income tax on dividends. 'These funds would allow the state to borrow less or keep higher reserves. According to current forecast there will be a saving on interest costs of EEK 260 million annually,' the Minister said. The extraordinary dividend pay-out would provide EEK 518 million towards balancing the budget. 'A commitment to a dividend policy in the near future is important for the state in terms of planned income tax revenues. At the same time there are no guarantees regarding the share price or the profitability of the company, which constitutes a risk in the long term,' added Jürgen Ligi. The Republic of Estonia owns 24% and the Estonian Development Fund 3% of Eesti Telekom shares. The state has received EEK 2.18 billion in dividends from the shares, with an additional EEK 126.2 million to the Estonian Development Fund. Additionally the state has received income tax associated with dividends paid to Eesti Telekom shareholders totalling EEK 2.53 billion since 2004. News Source: NASDAQ OMX 23.09.2009 Financial News transmitted by DGAP --------------------------------------------------------------------------- Language: English Company: Eesti Telekom Estonia Phone: Fax: E-mail: Internet: ISIN: EE3100007220 WKN: End of News DGAP News-Service ---------------------------------------------------------------------------
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