Daewoo Corp Wins Rights For Kazakh Telecom Stake
South Korea's Daewoo Corporation has won a tender for the exclusive negotiating rights to a 40 per cent stake in telecoms monopoly NAK Kazakhtelekom, Kazakh finance minister Alexander Pavlov said on Tuesday.
We chose to give exclusive negotiating rights to Daewoo Corporation, Pavlov told a news conference, saying the company had offered $1.370 billion for the share in the former Soviet republic's ageing telecoms network.
Daewoo beat five companies in the tender, including South Korea's Hanwha, Germany's Siemens AG, Alcatel Alstrom SA unit Alcatel Sel AG, Malaysia's Usaha Tegas Sdn Bnd and British Virgin Islands registered Kaztel Investment Group.
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An agreement could be signed between the Kazakh government and Daewoo on May 31 this year. A framework agreement signed last year with Germany's Deutsche Telekom AG for management control and a 49 per cent stake in Kazakhtelekom fell apart in December. Pavlov said $1 billion of the $1.37 billion proceeds would be invested in Kazakhtelekom, the government would receive $100 million and a further $40 million be used to pay off state debts to the monopoly.
The remainder, worth about 390 million marks, would go to pay off Kazakhtelekom's debts to Germany's investment agency, Kreditanstalt fur Wiederaufbau.
Daewoo Corp's executive director Kim Bong-Bu said the company planned to raise the number of telephone lines in the Central Asian nation from around two million to 3.3 million by the end of the decade. Kazakhtelekom has the monopoly on international lines for 15 years. But management control of the troubled telecoms service remains to be negotiated.
The question of management is still a question but they (Daewoo) will not have full control, said Serik Burkitbayev, chairman of Kazakhtelekom.
Meanwhile, reports from Warsaw say Daewoo plans to invest a total of $2.215 billion in the automotive industry in Poland by 2001, according to the financial head of Polish Daewoo-FSO car plant.
Until 2001 we want to invest $2.215 billion in three already operating companies as well as a network of firms and branches, Janusz Lach said.
He said investment in Daewoo's plant in the south-eastern town of Lublin would total $500 million by 2001 and another $215 million in the engine plant Andoria in the town of Andrychow. Maciej Motelski, head of Daewoo-FSO's production, said that until 2001 investment in the Daewoo-FSO plant in Warsaw would total $1.5 billion of which one-third would be spent in 1996-1997.
"We want to produce 500,000 cars annually in Daewoo-FSO. Investment in 1996 and 1997 will total $507 million," he said.
Lach said that under the investment programme Daewoo would start assembling a new car model called Lanos in September 1997 and start fully producing it in Poland in March 1998. He said that in October 1997 the company would start assembling the Laganza model and that it would also introduce a third model, Nubira, at an unspecified date.