Ukraine’s State Property Fund (SPF) has proposed buying minority shares in nationwide fixed line provider Ukrtelecom, whilst the telco remains under threat of renationalisation due to debts owed to state banks by its parent company SCM, alongside alleged unfulfilled obligations of the operator’s original privatisation contract, which SCM inherited from Ukrtelecom’s previous owners. As reported by BizLiga, the government, initially via the SPF, is now looking to become a minority shareholder in Ukrtelecom as a partial solution to the overdue debt repayment situation, and in return the SPF has proposed to cancel the terms of the original privatisation contract. One highlighted condition of the contract which remains unfulfilled is an obligation for Ukrtelecom to build, and transfer to state control, a ‘special communications’ network for secure government departmental usage (expected to be ready in 2013, but postponed ever since). The contract terms were verified as remaining legal and binding in a February 2017 decision, and after SCM challenged the result the SPF re-examined the details and issued a follow-up ruling on 22 March that the decision stood. According to sources cited by BizLiga, a likely outcome is that the government, represented by state banks, will receive a non-controlling stake of around 40% in Ukrtelecom in exchange for debt restructuring, giving SCM another few years to make repayments.
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