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The Privatization of ANT: Simulation and Final Discussion. Telecomunicações: Desafios e Oportunidades para Novos Negócios Paul Vaaler Lee McKnight Burkhard Schrage Lisbon, May 15, 2003. The Privatization of ANT: Tentative Schedule. 9:00 Short introduction
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The Privatization of ANT:Simulation and Final Discussion Telecomunicações: Desafios e Oportunidades para Novos Negócios Paul Vaaler Lee McKnight Burkhard Schrage Lisbon, May 15, 2003
The Privatization of ANT: Tentative Schedule 9:00 Short introduction 9:30 Intra-group discussions 10:00 Negotiation between players 12:00 Deadline for deals, presentation 12:30 Debriefing
The Privatization of Anatolia National Telekom • General instructions in course packet • Confidential instructions for six parties • Selling Parties • ANT • TAD • CORA • Buying Parties • BOW • NALI • EUTEL • Excel file ANTValue on course website: http://in3.dem.ist.utl.pt/master/telecompolicy • Use of software “CrystalBall” is optional. See with Burkhard Schrage if you want to have a copy.
The Privatization of Anatolia National Telekom:What Did Happen?
Highlights 1998 - 1999 • Privatization attempt stalled in early 1998 • Political considerations: new elections in 1999. • Privatization idiosyncratic factors: more than 30 national telecoms were privatized during 1998/99. Turkey did not have a regulator yet. • 1999: Focus on other, small privatizations. Defining regulatory and legislative framework. Installation of an embryonic regulator.
Highlights 2000 • Appointed new financial advisors in June 2000. • Deadline August 15, 2000. No foreign investor even purchased bidding documents. Five local groups did, but did not visit the data room. • December 2000 • Strategic stake increased to 35% from 20%. • Strong management rights attached to the stake • Day to day run by strategic investor. • Strategic decisions by board of directors, where government has a seat. • Other deal-sweeteners: • GSM license (approx. value of $2.5bn). • Monopoly in wireline telephony until 2004. • New bids invited until mid-May 2001.
Highlights 2001 • Road show was kicked off in January, but was halted before seeing London investors. • ”Hard” IMF deadline for mid-May postponed sine die. • End of March Supreme Court ruled privatization as “illegal”. Privatization has to go through another legislative process. • IMF is now thinking of a 51% public offering.
Foreign Investors’ Concerns • Market timing, both Turkey and telecom sector. • Capital constraints of likely investors. European telecoms spent $175bn in UMTS licenses. • Serious doubts about corporate governance mechanisms. • Low profitability per line compared to other telecoms. Low wireline growth expectations.
Nothing done Process halted (2) Process halted (1) Elections Process halted (3) Missed Window of Opportunity
Telecomunicações: Desafios e Oportunidades para Novos Negócios • Thank you very much! • We enjoyed participating in the seminar, and please do not hesitate to contact us should you have any questions. Enjoy the last session with Prof. Sirbu in two weeks from today. • Paul Vaaler: paul.vaaler@tufts.edu • Lee McKnight: lmcknigh@syr.edu • Burkhard Schrage: bschrage@dem.ist.utl.pt