The Iranian Privatization Organization has cancelled the privatization deal of the Telecommunications Company of Iran, proclaimed as the largest selloff of its kind in the country, by blaming it on the majority shareholder’s failure to honor its commitments.
Fifty percent plus one share of TCI were sold to Mobin Trust Consortium in 2009 at 78 trillion rials ($2 billion at market exchange rates). Twenty percent of the purchase money were paid in cash and the rest were to be paid in 16 installments of 4.84 trillion rials ($124.1 million) every six months.
Despite repeated extension of payment deadlines, Mobin Trust Consortium failed to meet its contractual obligations, according to an IPO advisor, Jafar Sobhani.
“Therefore, IPO decided to revoke the takeover deal in accordance with the terms of the contract,” he added.
Noting that TCI's stock value is much higher than the price it was sold at in 2009, the official said IPO is determined to defend the country’s national interests by cancelling the contract “with the knowledge that TCI is a profit-making company”.
A report by Persian daily Shargh said the $2-billion takeover price of TCI is one-80th of the company’s real value and that the accumulated revenues during the past six years from only one of its affiliated companies (i.e. Mobile Telecommunications Company of Iran or MCI) are 51 times more than its selloff price.
“IPO will soon put the government’s share of the company up for auction,” Sobhani added.
According to Mir Ali Ashraf Abdollah Pouri-Hosseini, the head of IPO, the value of Mobin Trust Consortium's bad checks stand at 10 trillion rials ($256.41 million).
Seyyed Mostafa Seyyed Hashemi, chairman of Mobin Trust Consortium's Board of Directors, believes “negotiations with IPO will solve the problem”.
An informed source with TCI, who wished to remain anonymous, told IRNA that IPO can only reclaim a fraction of the company since Mobin Trust Consortium has paid a large part of the purchase money.
Telecommunications Company of Iran is the leading provider of telecommunications services in the country. It was established in 1971 and holds 30 provincial affiliate companies and two top brands called MCI (also known as Hamrah-e Avval) and FCI (Ashenaye Avval or Fixed-line Company of Iran).
TCI services include fixed-line telephone service, data services, mobile services, high-speed Internet and wireless services. TCI owns 99% of the fixed-line telephone subscribers and 61% of the mobile subscribers in Iran.
MCI is the first and the largest mobile operator in the country and has the largest number of subscribers in Iran.
Source: Financial Tribune