The Swiss government has agreed to a slimmed down proposal for the sale of the state's stake in Swisscom, the country's leading telecoms provider.This content was published on March 17, 2006 - 16:26
It has ditched an earlier plan to offer a people's share scheme, the finance ministry announced in a statement on Friday.
The cabinet had decided... to keep to the principle of the state no longer participating in Swisscom, the statement said.
The government is currently the major shareholder in the cash-rich company, holding a 62.45 per cent stake.
The ministry said that keeping a controlling minority stake was a possibility but would be a second-best option.
However, the statement added that government would no longer propose to parliament the idea of offering discounted shares to small investors as part of the sell-off.
The government late last year crushed Swisscom's plans to expand abroad by blocking its attempts to reach a takeover deal for Ireland's Eircom.
It then imposed financial and strategic limits on what the company could buy, leading to the departure of chief executive Jens Adler. He was replaced by Carsten Schloter.
Swisscom announced earlier this month a 2005 net profit of SFr2.02 billion ($1.54 billion), up 26.7 per cent compared with the previous year.
Bern says it clipped Swisscom's wings to protect its multi-billion Swiss franc stake in the firm and prevent taxpayers' money from going to foreign investors.
The statement also summarised the outcome of the consultations over the planned privatisation.
A slim majority of cantons had come out against the move, in part on fears over guaranteeing basic services to remote mountain villages, should the company be sold.
Political parties were split – with the rightwing Swiss People's Party and the centre-right Radical Party for and the centre-right Christian Democrats and centre-left Social Democrats against.
Trade unions were reported to have rejected the plan, while business lobbies welcomed the scheme.
The results [of the consultation] are controversial, and there was no clear majority for or against the proposals, the ministry said.
The sale proposal is due to be presented to the House of Representatives on May 10 and then move to the Senate.
swissinfo with agencies
Financial year 2005
Revenue: SFr9.732 billion (-3.2% compared with 2004)
Ebitda: SFr4.171 billion (-4.9%)
Net profit: SFr2.022 billion (+26.7%)
Proposed dividend : SFr16 (SFr14)
Mobile customers : 4.28 million (+9.5%)
Employees at the end of 2005: 16,088 (+4%)
Swisscom is the dominant player in the Swiss telecommunications market.
It had a monopoly of the market until 1998.
The government announced on November 23 that it wanted to sell its majority stake. The following day it banned Swisscom from buying foreign companies, pulling the rug out from under a proposed takeover of Ireland's Eircom.
But it later clarified its ban on foreign acquisitions, saying it only related to fixed-line operators.
The finance ministry said in December that the government had a 62.45 per cent stake in the company.
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