Croatia raises sale of Telecom shares to 32.5 percent

A greater portion of the public telecommunications company than originally planned will be sold to citizens of Croatia, the government said.

The government had planned to sell to sell 20 to 23 percent of Hrvatske Telekomunikacije d.d. (T-Com) - the majority of which is already controlled by Deutsche Telecom - in a public tender that opened on Sept. 17.

But it said Monday it would sell 32.5 percent of the company because of huge interest on the part of ordinary Croatians in owning a piece of the profitable company.

"We all are aware of the big interest of Croatian citizens in this public tender," said deputy Prime Minister Damir Polancec.

Now, 25 percent of the shares of T-Com will be reserved for the citizens and 7.5 percent for institutional investors, he said.

The rest of the shares are to be listed at the Zagreb and London stock exchanges after the tender closes on Oct. 5.

The sale has triggered unprecedented interest among average Croatians, who have waited in long lines to bid on the shares. Some even took out loans to make the purchase.

The huge interest comes in part because it is only the second time that the shares of one of the most profitable companies in Croatia have been sold in a public tender. The government sold 17 percent of the shares of the oil monopoly INA last year.

And local analysts have predicted that buying shares of T-Com will bring certain profit.

Croatian citizens have priority in buying the T-Com shares, but each citizen can spend only a maximum of 38,000 kuna (EUR5,200; US$7,330).

The tentative price per share has been set at 245-320 kuna (EUR34-38; US$44-62). The government will determine the exact price on Oct. 1. At that point the bidders will pay for the nearest number of whole shares that can be bought for the amount they have bid.

After the sale, the government will own only 2.5 percent of T-Com - a company that was once 100 percent government-owned. The government sold 51 percent of the company to Deutsche Telecom in 2001, in part to raise cash and in part to follow the models of Western-style economies. War veterans own 7 percent of the company; T-Com employees own another 7 percent.