AlbTelekom sold for peanuts

A couple of weeks ago, a Turkish company called "Turk Telekom & Celik Energy" was the only - and winning - bidder for 76% of Albania's state-owned landline communications monopoly "AlbTelekom." I don't know much about the buyer, except for the fact that they were the only bidders, despite claims by one of the most corrupted Ministers of the Albanian government that several companies, including a US-based one and Samsung were contenders in this "bidding" process. These companies were contacted by Mr. Gary Kokalari, a financial analyst with Merrill Lynch in New York and they denied they had expressed any interest in AlbTelekom. The fact that there was only one bidder, certainly proves Mr. "Bananas" Minister was lying out of his ass just to make people think of how hard the gov't is working as elections get closer. The whole "bidding" process is a book on its own, worthy for Sir Arthur Conan Doyle so I'm not going to get into that right now. Before I go any further, allow me to tell you that I have nothing against privatizing government-owned entities. As a matter of fact, I'm very much against governments owning anything and would like to see their role in the economy to be reduced as much as possible.

What struck me though was a short, not-important looking news, tucked away among other more important news (e.g. which one is the true logo of Gallup International) in one of the largest Albanian dailies. It mentions that Celik Energy has a certain deadline to start operating Eagle Mobile. What? Wait a second, I don't remember any mentioning during the fanfare of putting AlbTelekom up for sale of any "buy one, get one free" deal!

I don't have much info on AlbTelekom so I don't know its true value. I would like to believe that the Albanian people (well, the government, or who knows which corrupted individual there) got a good price for their investment (afterall, AlbTelekom was built with their taxes and fees, etc.). But $120 million, even if it's for "only" 76% of the one and only fixed line telephone company, sounds suspiciously low for such a monopoly, especially since there are no laws or regulations, as far as I am aware, which will regulate what AlbTelekom can and cannot charge it's customers. And the icing on the cake is that Albania's fixed line telecom industry is not liberalized, so Celik Energy will be able to have the cake and eat it too! Just imagine the money-making possibilities... .

Getting back to my main concern for this writing that is making me believe this was a very shady deal: why wasn't mentioned the fact that this "package" included the license for Eagle Mobile, Albania's third mobile phone operator? Based on this fact, the price that Celik Energy paid for AlbTelekom is diluted to peanuts and is not what the corrupted bureaucrats boasted.

I will not claim I have any insider info or any coffeshop gossip but let's review some publicly published facts: In 2000, six-seventh of the shares of AMC (Albanian Mobile Communications: the very first company licensed and built in Albania by AlbTelekom) were purchased by Greece's Cosmote for $85.6 million. One year later, Vodafone's Greek subsidiary (yes, the Greeks did strike gold in Albania during Nano's reign) bought the second license for $38 million.

Since there were no details given about Eagle Mobile, I do not know whether it involves just the license or infrastructure as well. Let's take the best-case scenario (to make the filthy government scums look a little better) and assume that it's only a license. So, taking Vodafone's price as a benchmark (because I don't know the true value of that license and I'm not willing to speculate on that now) and adjusting it up for inflation only (again, best-case scenario), we end up with a license price of around $42 million. Subtracting that from $120 that Celik Energy paid, and AlbTelekom's price, Albania's one and only fixed line phone monopoly, dilutes to a pathetic $72 million! A median case scenario, taking Vodafone's purchasing price of AMC and adjusting for inflation ($95 million) makes AlbTelekom worth only $25 million! I guess it will take Celik Energy a year or so to recoup their investment!

I haven't been able to find any info so far regarding terms and conditions of AlbTelekom's sale. Therefore, I don't know if Celik Energy is buying just the technical infrastructure or the real estate and land of AlbTelekom as well. So far I've assumed that they're buying just the former. The worse case scenario builds up on the previous two assumtions: take those numbers (either $42 or $25) and substract the value of real estate and land. Taking into consideration the sky-rocketing value of real estate in Albania (especially in Tirana), it is very easy to come to conclusion that Celik Energy is buying AlbTelekom for free as the sum of what they paid will be a negative one! This means that, if they want to, they can just turn around and make millions of dollars the very next day simply by selling all this real estate that didn't cost them anything!

I'm curious to know how did the Albanian bureaucrats deceive everyone with this scam? It's even more interesting that the infamous IMF even gave its seal of approval (according to some Albanian newspapers) to this heist! If it's true that IMF approved this deal and if I am able to prove the above scam, I will do anything in my power to make sure the IMF person responsible of giving his/her permission will face consequences.

I'm also curious to know how many of PM Nano's leisure trips to Turkey (including his lasik surgery) were "hosted" (read: paid in full) by Celik Energy or any of its affiliates... .