OREANDA-NEWS. May 19, 2010. Ukraine’s State Property Fund plans to announce the privatization auction for the state’s 92.79% stake in Ukrtelecom (UX: UTLM UK) in August, according to a notice published in the government’s official privatization newspaper this morning.

Concorde Capital: We see Deutsche Telekom, MTS and Turkcell as likely bidders for Ukrtelecom. We note that the price bidders are ready to pay depends on 1) creation of a universal service obligation fund, which should subsidize the loss-making social services of Ukrtelecom (passage of the relevant legislation by parliament is required), and 2) absence of requirements to retain its huge workforce, the main cost driver of Ukrtelecom. If, as planned, the state announces the auction in August, it should take place 75 days later in late October–November. We expect a positive market reaction to the news.