Colombian state-controlled telephone company Empresa de Telecomunicaciones de Bogota SA (ETB.BO), or ETB, will select a partner to inject fresh capital in return for a controlling stake in the company around April 5, 2010, ETB said in a filing to the local market regulator.
The company originally planned to carry out the auction of the controlling stake around Oct. 16, but had to delay it after a court suspended the process in September as part of a lawsuit started by the company's labor union, which fears massive layoffs if a private operator takes the company over.
The company will sell new shares, equivalent to a 36.6% stake, to the new partner in a public auction. ETB will select the partner that offers the highest amount per share.
The companies interested have until Nov. 25 to register as bidders.
The city council, which currently controls the company, will change its current shares into non-voting shares so the new partner will control the company.
At the same time, ETB will sell other shares to the current minority holders at the same price so that they avoid the dilution of their stakes.
The new partner will then have to offer minority holders a chance to buy their stakes in a tender offer around Sept. 9, 2010.
The Bogota city council now holds 86.59% of ETB, while minority shareholders have the remaining 13.41%, according to the company's Web site.
ETB needs capital to face rising competition from Spain's Telefonica SA (TEF) and Mexico's Telefonos de Mexico SA (TMX). ETB's revenue from fixed-line and long-distance calls has stagnated as all three companies now offer fixed-line, Internet connection and cable TV bundled together, a service known as triple play.
Shares of ETB ended 3% down Wednesday at 1,130 Colombian pesos ($0.58), while the IGBC stock index fell 1.1%.
-By Inti Landauro, Dow Jones Newswires; 57-1-610 70 44 Ext. 1131; colombia@dowjones.com