Colombia Court To Rule On ETB's Appeal In 2 Weeks - ETB Executive
07 October 2009 - 5:59AM
Dow Jones News
The Colombian court considering the case between Colombia's
state-controlled telecommunication company, Empresa de
Telecomunicaciones de Bogota SA (ETB.BO), and a workers union will
rule on ETB's appeal within two weeks, a company official said
Tuesday.
"Our appeal was in the judge's office on Monday and we expect an
answer within the next two weeks," Andres Perez, ETB's general
secretary, said Tuesday.
On Sept. 22, a court ordered ETB, which is controlled by the
Bogota city council, to halt its attempt to seek a controlling
partner on the request of the labor union, which fears massive
layoffs if a private operator takes the company over.
Perez said he is confident the ruling will be favorable to the
company.
ETB's share price plummeted after the company revealed the
lawsuit on Sept. 16, and it fell more when the court released the
order. ETB's shares lost 22% between then and Tuesday.
ETB shares rose 0.9% on Tuesday to end at 994 Colombian pesos
($0.52).
ETB plans to sell new shares, equivalent to a 36.6% stake, to a
new partner to be selected in a public auction.
The city council then plans to convert its current shares into
non-voting shares. The new partner must commit to holding a tender
offer to buy out minority shareholders at the same price as offered
in December. If all minority shareholders accept the offer, the
partner will end up with a stake close to 49%, but with a majority
of voting shares.
ETB's share price has climbed over the past few months on
expectations the new partner would pay a significant premium to
gain control of ETB. Between July 6 - when the company announced
its search for a partner - and mid-September, ETB's shares had
gained 41%.
The Bogota city council now holds 86.59% of ETB, while minority
shareholders have the remaining, according to the company's Web
site.
-By Inti Landauro, Dow Jones Newswires; 57-1-610 70 44 Ext.
1131; colombia@dowjones.com