Dutch telecoms group KPN has said it is not in direct talks with any parties over the sale of its 21 per cent stake in Eircom. It confirmed yesterday its plan to dispose of the stake but added all negotiations were being conducted via the Eircom board in the context of several possible bids for the company's non-mobile assets.
Eircom's mobile arm, Eircell, is being sold to Vodafone in a deal expected to go through in early May. The all-share deal is worth €1.55 per Eircom share based on last night's Vodafone closing price of £204.5 sterling (€327), which would net €651 million (£513 million) for KPN. Eircom has already rejected a €2.2 billion offer for the fixed line business from eIsland, a consortium led by Mr Denis O'Brien, but talks continue.
The group wants to cut at least €5 billion off its almost €22 billion debt through asset sales, and said it hoped to return to an underlying net profit in 2003.
The company reported a 2000 net profit of €1.87 billion but this included a €2.3 billion gain from the sale of a 15 per cent stake in KPN Mobile to Japanese cell phone company NTT DoCoMo.
Excluding this gain, KPN made a net loss of €626 million, compared to a profit of €771 million in 1999.
"This [loss] was significantly less than a lot of people had been expecting," said Mr Wouter van Baal, fund manager with Dutch broker Eureffect.
KPN stock closed 5 per cent higher at €11.60 as the market welcomed results above analysts' forecasts. The share price remains far below its record of €75.63 on March 6th, 2000.
Earlier this year, KPN was Europe's only former telecoms monopoly to have its credit rating cut to triple-B - the lowest investment grade bracket - amid concern it would be unable to make sufficient inroads into reducing its debt.
