The Swiss cabinet wants to sell its stake in Swisscom to "the widest possible circle of takers", as part of its strategy to divest itself of the telecoms company.This content was published on January 25, 2006 - 19:27
The finance ministry said in a statement it intended to offer shares at a special price to small investors in a bid to prevent Swisscom from falling into foreign hands.
"The cabinet wants to ensure that in disposing of the shares, they should be spread as widely as possible," it said. "In addition, small shareholders should be made an offer, in the spirit of a 'people's share'.
"In doing so, the cabinet is consciously foregoing a sale at the highest possible price and creates good conditions for Swisscom being able to remain independent," Finance Minister Hans-Rudolf Merz said.
The government opened a six-week consultation period on Wednesday, the first step towards privatisation of the former state monopoly.
The cabinet approved a draft consultation paper to allow the state - Swisscom's majority shareholder - to sell its entire 62 per cent stake in the company. Parties and organisations concerned have until March to submit in writing their opinions.
In a first reaction, the centre-right Radical Party and the rightwing Swiss People's Party, as well as the Swiss Business Federation, welcomed the cabinet plan.
However, the other two main parties in government - the centre-left Social Democrats and the centre-right Christian Democrats - came out against the proposal.
For its part, Swisscom said it would examine the document and accompanying measures in detail before responding.
"Swisscom views the proposal as positive overall and expects the political issue to be rapidly resolved. The sale of the government's interest will increase Swisscom's corporate strategic flexibilty," Swisscom said.
After the consultation process, the cabinet will submit a formal draft law to parliament for debate, likely to take place in June.
But Swiss voters could have the final say on the issue next year. Trade unions have threatened to challenge the planned sale of the country's largest telecoms operator in a nationwide referendum.
Last week the Swisscom board of directors named Carsten Schloter as the new chief executive officer, replacing Jens Alder who clashed publicly with the Swiss government over the company's business strategy.
Alder, who was a strong proponent of aggressive expansion abroad, said he decided to leave the firm after the cabinet approved a four-year strategy for Swisscom which severely restricts its activities abroad.
Swisscom was in advanced takeover talks with Ireland's former state telecoms monopoly Eircom last November, when the government announced that it intended to sell its stake in the company, worth some SFr17 billion ($13.3 billion).
The cabinet also said Swisscom would no longer be permitted to make foreign acquisitions. The ban on acquisitions relates to fixed-line operators.
swissinfo with agencies
The Swiss government announced on November 23 that it intended to sell its majority share in Swisscom.
The following day it banned Swisscom from buying foreign companies, pulling the rug out from under a proposed takeover of Ireland's Eircom.
On December 2 the government clarified its ban on foreign acquisitions, saying it only related to fixed-line operators.
Later that month, the cabinet outlined its four-year strategy for Swisscom, including privatisation.
The privatisation process has now begun, with the cabinet approving a draft consultation paper on changing the law to allow it to sell its controlling stake in Swisscom.
This article was automatically imported from our old content management system. If you see any display errors, please let us know: firstname.lastname@example.org