CTE Telecom registers shares

Wednesday, October 9, 2002

El Salvador's incumbent telco and full service operator CTE Telecom has registered its shares on the local stock exchange, Salvadorian daily El Diario de Hoy reported.

CTE registered 46,120,200 shares at a nominal value of US$11.43/share on the stock exchange, giving the company a market capitalization of US$527mn. The book value of the shares was slightly higher, at US$11.98/share.

The registration covers the whole of the company's equity and is for common stock at nominal value, the stock exchange's undersecretary Javier Mayora said.

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The company registered the shares with an eye to April 2003, when its privatization contract will permit employee shareholders to begin trading their shares.

France Telecom (NYSE: FTE) paid US$275mn in June 1998 for a controlling 51% stake in the former state-run telco. The state retained 42.5% of the company, while the remaining 6.5% was sold to employees. The state's equity interest consists of a 28.5% direct stake and a 14% block held in trust for company clients.

The state is expected to float that 14%. The government was looking at listing on the New York Stock Exchange in mid-2001, but those plans never materialized.

There has not been any indication so far that cash-strapped France Telecom may consider selling some or all of its own interest in the company. When it took over the telco in 1998, France Telecom said it would invest US$400mn in the company over a five-year period, to double fixed line network capacity and roll out a mobile network.

At the end of May this year, CTE had 638,655 local subscribers, having added nearly 41,000 lines in the first five months of the year. The company also boasted around 200,000 mobile subscribers on its GSM network.