Bezeq CFO Oren Lieder today said that the one-year delay in the company's privatization has put the company under such a tight schedule that the deadline itself now jeopardizes the privatization.
The state published the sale notice on November 13, and bidders have to submit their proposals by February 13, 2002.
Lieder, speaking at a company press conference, singled out two main obstacles to privatization: Raising money for employees' early retirement and the land dispute.
Bezeq hopes to raise some NIS 900 million through a public offering. Lieder said that raising the capital to partially finance the early-retirement plan is one of the privatization terms. He also said that according to agreements between the state and Bezeq shareholders, the public offering must be held after the publication of the sale notice. Lieder said that the offering is to be based on NIS 6 per share, and that Bezeq is to allocate additional shares by February 28, 2002.
The second obstacle according to Lieder has to do with the land on which several Bezeq facilities are located. Both the state and Bezeq claim ownership of the land and resolution of the dispute will significantly affect Bezeq's valuation for the purposes of privatization.
He said that in August 2000 the state allocated two weeks to reach a settlement, but sixteen months after the decision to end the dispute, the settlement mechanism is still not ready. Lieder said that rather than the market situation, it is these problems which could impair privatization.
Lieder associates the deterioration in Bezeq's third quarter financial results to the eroded results of its subsidiaries, mainly Pele-Phone. He said that Bezeq International posted better results than in previous quarters.
Lieder said that the deterioration in the third-quarter results of satellite television company YES is relatively technical and that its losses are quite stable. Lieder added that expenses are generated by each customer and by YES continued rapid growth.
Bezeq CEO Ilan Biran said that the privatization is right and should be carried out. HE agreed with Lieder's assessment that the cash for the early retirement plan and the land dispute are the main obstacles.