Swisscom boss pushes for privatisation
Carsten Schloter, CEO of Swisscom, Switzerland's largest telecoms firm, has said privatisation would be "positive from a business point of view".
However Finance Minister Hans-Rudolf Merz said yesterday that the chances of parliament agreeing to the government selling its majority stake were "fifty-fifty".
In an interview with the NZZ am Sonntag newspaper, Schloter stressed his support for government plans to sell off its share but admitted it was too soon to say which way the privatisation debate would go.
"If I were to give investors the impression that it's a done deal and the government went on to keep a hold of Swisscom, my credibility would go out the window," he said.
The sale proposal is due to be presented to the House of Representatives on May 10 and then move to the Senate.
On Saturday Merz underlined that Swisscom is not an emergency case like heavily indebted former national airline Swissair and added that the government's decision to sell off its stake was not taken completely out of the blue.
In mid-March the government agreed to a slimmed down proposal for the sale of the state's stake in Swisscom, ditching an earlier plan to offer a people's share scheme.
The finance ministry said the cabinet had decided to keep to the principle of the state no longer participating in Swisscom.
The government is currently the major shareholder in the cash-rich company, holding a 62.45 per cent stake.
The finance ministry said that keeping a controlling minority stake was a possibility but would be a second-best option.
However, the ministry added that government would no longer propose to parliament the idea of offering discounted shares to small investors as part of the sell-off.
A slim majority of cantons had come out against the move, in part on fears over guaranteeing basic services to remote mountain villages, should the company be sold.
Political parties were split – with the rightwing Swiss People's Party and the centre-right Radical Party for and the centre-right Christian Democrats and centre-left Social Democrats against.
Schloter, a German national, replaced Jens Alder as chief executive in January 2006 following Alder's resignation over the firm's future strategy.
Last November Swisscom was in advanced takeover talks with Ireland's former state telecoms monopoly Eircom, when the government suddenly announced that it intended to sell its stake in the company, worth some SFr17 billion ($13.27 billion).
The following day, ministers said Swisscom would no longer be permitted to make foreign acquisitions, a dramatic statement which effectively called off the Eircom deal overnight.
Shares in Swisscom nosedived, while company executives were forced to admit that they had been caught unawares by the announcement.
Bern says it clipped Swisscom's wings to protect its multi-billion Swiss franc stake in the firm and prevent taxpayers' money from going to foreign investors.
Swisscom is the dominant player in the Swiss telecommunications market.
It had a monopoly of the market until 1998.
The government announced on November 23 that it wanted to sell its majority stake. The following day it banned Swisscom from buying foreign companies, pulling the rug out from under a proposed takeover of Ireland's Eircom.
But it later clarified its ban on foreign acquisitions, saying it only related to fixed-line operators.
The finance ministry said in December that the government had a 62.45 per cent stake in the company.
Swisscom financial year 2005
Revenue: SFr9.732 billion (-3.2% compared with 2004)
Ebitda: SFr4.171 billion (-4.9%)
Net profit: SFr2.022 billion (+26.7%)
Proposed dividend : SFr16 (SFr14)
Mobile customers : 4.28 million (+9.5%)
Employees at the end of 2005: 16,088 (+4%)
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