Tehran, September 28: A majority stake in Iran’s only state-owned telecommunications firm was sold on Sunday to a private consortium in an eight-billion-dollar deal, the largest privatisation in the republic.
Three Iranian firms, part of a consortium named Etemad Mobin Development, bought 50 percent plus one share of Telecommunication Company of Iran for 78.191 trillion Iranian rials (7.8 billion dollars or 5.3 billion euros), state television reported.
The deal, which had a base price of 3,400 rials (34 cents) per share, was completed in just 35 minutes during Sunday’s trading hours on the Tehran Stock Exchange.
The winner outbid another group led by the Iranians’ Economy Investment Company of Mehr — formerly called Basij Loan Institution.
“Because it was a high value deal and Mehr has already been making large purchases in other shares, it could not meet the price we were asking,” Mohammad Javad Salimi, the broker who handled the stake sale, said.
“The winning consortium scored over its only rival because of negotiations, its knowledge of the telecommunications sector and its plans to develop the company’s technology,” he added.
Salimi, the managing director of brokerage firm Bahman, said the purchasing consortium comprised two private companies and one firm partly owned by the government.
The state currently has a grip on around three-quarters of Iran’s economy and in any such stake sale, the government still retains 20 percent of the equity.
Iran’s privatisation drive, launched in 2006 by supreme leader Ayatollah Ali Khamenei, envisages selling 80 percent of state-owned companies in the banking, media, transport and mineral sectors.
Economists have criticised President Mahmoud Ahmadinejad’s government for dragging its feet over privatisation.
In most stake sales, the government hands out 20 percent of the equity in such privatised companies as “justice” shares to the poor and keeps 20 percent for itself.
Of the remaining 10 percent, five percent is given to employees of the company and the rest is offered publicly to set a price prior to the majority stake sale.
This formula was followed in the privatisation of Telecommunication Company of Iran.
Meanwhile Salimi expressed the hope that the deal will come to the attention of international investors and also boost Iran’s telecommunications infrastructure.
—Agencies