Analyst: Telekom Srbija doesn't want to open its business to public

Source: N1

Financial analyst Branislav Jorgic said on Wednesday it would be better for Telekom Srbija to publish a business prospectus and issue corporate bonds for "unknown" customers, including citizens, investors, pension and insurance funds, instead of allocating them to pre-known customers - banks as professional investors.

Jorgic told the Beta news agency the national telecommunications operator chose not to publish a business prospectus and not to offer those securities through the Belgrade Stock Exchange, it issued bonds only for banks last week.

„With this transaction, Telekom did not violate the Decree on the procedure for issuing debt securities, which simplifies the procedure for issuing bonds during the state of emergency and six months after its expiration,“ Jorgic, also the director of the brokerage house „Jorgic broker“.

Serbia’s Government adopted the Decree on April 10, as part of measures aimed at large companies to ease the economic effects of the pandemic, and encourage the use of an additional source of capital to provide funds for business and investment projects.

The General Meeting of Telekom shareholders decided on the issue of local dinar currency corporate bonds with a maturity of five years, for 23.5 billion dinars (about 200 million Euro) at a market interest rate of 3.97 percent.

As soon as Telekom Srbija issued corporate bonds, the National Bank of Serbia (NBS) bought half of the 100 million Euros issue on the secondary capital market from the banks that bought them, as the Belgrade Danas daily reported. The NBS has not yet confirmed.

Jorgic said it was unknown whether the banks sold the bonds at the full price of the coupon or a discount, but they were paid with money from the primary issue.

„That money from the primary issue will not affect the growth of inflation because it is not a significant amount,“ Jorgic said.

When asked what could be the banks’ motive to resell NBS bonds soon after the purchase, Jorgic said that could mean that the banks rather „wanted to do a favour to the state and help Telekom,“ than to take care about an economic interest.“

According to him, the motive for the purchase of Telekom bonds can be discussed only when the NBS publishes data on the conditions of purchase.

„It would be better if the bonds were offered on the Belgrade Stock Exchange because that would help the development of the capital market and make the business prospectus more transparent so that the investment community would evaluate the business with the offered price,“ Jorgic said.

He added that if banks sold bonds at a discount, it could mean business is questionable.

According to Jorgic, the issuing of bonds to a known buyer could mean that, apart from being a more painless procedure, Telekom also does not want to „open“ the business to the public.

„Besides that, such a choice for obtaining additional capital can be interpreted as the state financing of the Telekom through the NBS,“ Jorgic said.