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Belgacom, investors agree on IPO
(CNN) -- Belgium's biggest telephone company Belgacom is preparing for an initial public offering in 2004 after the Belgian government and a group of offshore investors reached agreement on key conditions. A series of transactions, including a transfer to the Belgian government of 5 billion euros ($5.85 billion) in obligations for Belgacom's employee pension fund, will pave the way for the share offer next year. The Belgacom float will be one of Europe's biggest listings in recent years, with the 40 percent stake on offer expected to raise about 4 billion euros ($4.68 billion). Belgacom is owned 50 percent plus one share by the Belgian government. The remainder is held by ADSB Telecommunications, a consortium made up of U.S. carrier SBC Communications, Singapore Telecommunications, Danish telco TDC and a group of Belgian investors. SBC has 35 percent of ADSB, TDC holds 33 percent, SingTel has 27 percent and the remaining 5 percent is held by the Belgian investors. SingTel invested S$930 million ($540 million) in 1999 for its 12.15 percent effective stake in Belgacom. According to a report in Singapore's Today newspaper, SingTel's stake is now worth about S$2.45 billion ($1.42 billion). In a statement Friday, SingTel said the financial impact of the Belgacom transactions "cannot reasonably be ascertained at this stage". SingTel shares are up 1.2 percent to S$1.70 in early trade. The broader Singapore market, measured by the Straits Times index, is 1.6 percent ahead. Before the float, Belgacom will buy 1.325 billion euros worth of ADSB shares in two tranches. It will retain these shares up to a maximum stake of 10 percent, to use in future strategic moves and staff incentives. Belgacom plans to buy 325 million euros worth of ADSB shares this year and the remainder at the time of the IPO. Reuters news agency reported from Brussels that Belgacom and ministers told a news conference on Thursday the Belgian state would remain a majority shareholder. While Belgacom and officials declined to give a value for the deal, analysts have said the carrier, one of the few in Europe to have virtually no debt, is likely to fetch an overall valuation of about 10.0-11.0 billion euros ($12-$13 billion). But Public Enterprise Minister Johan Vande Lanotte told reporters that talk of a valuation was premature. "You can't pre-empt the market," he said "The value will be the value that the market will place (on Belgacom)." Belgacom's overseas investors have been driving the talks to bring Belgacom to the market so they can sell minority holdings and refocus on their home markets. One industry source close to the talks said negotiations between the government and the investors were extensive. "For a long time, this was no done deal," the source told Reuters. "It went down to the wire as all these deals do." The company's shares will be listed on Euronext Brussels and will become one of the largest publicly listed companies in Belgium.
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