(Adds comments by city council head in second paragraph.)
June 1 (Bloomberg) -- Bogota’s city council may vote no sooner than July on a proposal that would allow the sale of the capital’s majority stake in Empresa de Telecomunicaciones de Bogota SA, said Maria Victoria Vargas, the council’s president.
“The vote would have to be in July,” Vargas said today in an interview in her Bogota office. “That’s if it happens at all. The proposal may not even get past the commission.”
Colombia’s capital city is seeking a buyer to finance the phone company’s planned expansions after a failed two-year search for what it called “strategic” partners. The mayor’s office will submit as soon as June 10 a proposal that would allow the city to sell part of all of its 86.6 percent stake, said Cristina Plazas, who was appointed to handle the proposal.
The council will have at least through the end of next month to study the project, Plazas said by telephone from Bogota today. Private owners would be able to make investments in infrastructure and technology “that the government isn’t able to make,” she said.
Plazas said she had no knowledge of potential buyers.
ETB fell 4.8 percent to 676 pesos today, the steepest drop since March 22. The stock has fallen 37 percent in the past year, the most among companies in Colombia’s IGBC Index.
ETB trades at 16.8 times estimated earnings for this year, making it the most expensive Latin American telecommunications company tracked by Bloomberg. It’s followed by Brazil’s TIM Participacoes SA, which trades at 16.7 times, and Chile’s Empresa Nacional de Telecomunicaciones SA at a ratio of 12.9.
ETB’s board recommended that Bogota seek a buyer as the company “is not able to generate necessary funds to increase its future value,” according to a Dec. 15 regulatory filing.
The government named Plazas as ad hoc mayor last week to handle the share sale proposal after acting Bogota mayor Maria Fernanda Campo declared a conflict of interest because she holds ETB shares, according to a decree on the presidential website.
President Juan Manuel Santos appointed Campo, who had been serving as education minister, to fill in for mayor Samuel Moreno after he was suspended on May 3 for three months amid a graft probe of alleged kickbacks from government contractors.
Santos said he has been considering nominees from Moreno’s opposition Polo Democratico Alternativo party. He denied using “delaying tactics,” saying he will pick a mayor by next week after interviewing Clara Lopez, the head of Polo, according to a statement on his website.
Vargas said an opposition mayor could block or delay a vote on the share sale proposal. An ETB spokeswoman didn’t respond to request for comment.
--With assistance from Eduardo Thomson in Santiago. Editors: James Attwood, Brendan Walsh
To contact the reporter on this story: Blake Schmidt in Bogota at Bschmidt16@bloomberg.net
To contact the editor responsible for this story: David Papadopoulos at email@example.com