Privatisation in Ukraine: Dinner for (Some)One

Article published in Finance Emerging Europe, Summer edition

It was meant to be a kind of a Christmas charity auction. After almost a decade of rumors and preparation, several famous and influential guests were expected to come to Ukraine to express their interest in an ill-shaped but attractive statemonopoly. But a few  days before Christmas 2010, only a single dinner guests howed up that had not even been on the original guest list. The grand event ended up as more of a private party; the competitive auction as a negotiated sale behind closed doors.
Being the only company to effectively bid for UkrTelecom, the Austrian Epic (European Privatization and Investment Corporation), through its subsidiary Esu (Epic Services Ukraine), agreed upon a price of UAH 10.5 billion (EUR 930m) for a 93 per cent stake in UkrTelecom. Many consider this a fair price, but an open auction might have fetched more in return for one of the country’s most  valuable assets. UkrTelecom boasts about 10 million telephone lines, representing a market share of 74 per cent, and more than 800,000 subscribers to its fixed broadband internet access, about a third of the market. Its main weakness, however, is the mobile phone market where it has been able to line up less than 400,000 subscribers so far.

The rest of the article on the Finance-EE website