Citi consortium bids to advise Serbia on Telekom

BELGRADE, May 10 (Reuters) - A consortium led by Citigroup is the sole bidder to advise Serbia on the sale of a 40 percent stake in its most successful state-run firm, Telekom Srbija, the finance ministry said on Monday. The tender commission will have two weeks to revise the financial offer by the consortium and decide whether to accept it, a statement said. In March, Serbia's government announced plans to sell half its 80 percent stake in Telekom Srbija and invest the money in infrastructure that fell in disrepair during a decade of wars and international isolation in 1990s. As part of the sales procedure, the government called a tender for a financial advisor to determine the value of shares and advise the best sale procedure. Deutsche Telekom has said it was interested in buying 40 percent stake of Telekom Srbija, in which Greek operator OTE holds a 20 percent stake. The total value of Telekom Srbija has never been disclosed but analysts estimate it at 2 billion euros ($2.7 billion). In 2009 it posted a 150 million euro profit. It is the only state-run company in Serbia that has expanded regionally, and owns a 65 percent stake in Bosnia's second-largest operator, Telekom Srpske, and has a mobile phone operator in Montenegro. Critics of the government plan to sell a stake in Telekom Srbija, including unions and opposition leaders, have said the government will use the money on a spending spree to boost the centre-right coalition's sagging popularity. The coalition of populists and pro-Western reformists is having trouble balancing pre-election promises of jobs and growth with the belt-tightening pledges to the International Monetary Fund as a part of 3 billion euro loan. (Reporting by Ivana Sekularac, Editing by Dan Lalor) ($1 = 0.7453 euro) Keywords: SERBIA TELEKOM/ ([e-mail]; [phone]: Reuters Messaging:[e-mail]) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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