The initial public offering in Telia and Telenor, the Swedish and Norwegian state-owned telecom operators which merged two weeks ago, is expected to amount to around 20 per cent of the company, it emerged yesterday as the two groups presented their nine-month results.
The offering, the biggest in the Nordic region, is scheduled to take place early next year. Shares in the company, which has still to be named, are expected to be listed in the US as well as in Sweden and Norway.
Analysts have valued the group, Europe's sixth biggest telecoms operator, at 300400 billion Swedish krone (€34.6 to €46.2 billion) which would value the IPO at SKr6080 billion. The final size and timing of the offering has still to be decided, and will be subject to market conditions.
The Swedish state owns 60 per cent of Telia-Telenor, and Norway 40 per cent. The merger was overshadowed by nationalistic bickering between the two governments.
As a result of the merger, Telia is expected to proceed with the sale of its 14 per cent stake in Eircom. Telenor owns 49.5 per cent of Esat Digifone which competes with Eircom's subsidiary, Eircell, in the Irish mobile phone market.
Telia and Telenor posted higher underlying profits in the first nine months, as powerful growth in fixed, mobile and Internet services helped offset the impact of lower prices.
Telia saw profits after financial items fall from SKr5.70 billion to SKr4.37 billion. The 1998 figure was inflated by SKr4.9 billion in capital gains.
The group said it had benefited from strong growth in Sweden, and cost-cutting had helped to reduce operating costs. It predicted it was heading for a record year, excluding capital gains. Telenor saw profits rise 100 million Norwegian krone (€12 million), excluding one-off items, to NKr1.73 billion.
