Alternattiva Demokratika and the government yesterday traded strong-worded statements on the sale of 60 per cent of Maltacom's shares to Tecom Investments.
Alternattiva Demokratika spokesman on economy and tourism Edward Fenech described the sale as "a scandal", with the Investments Ministry coming back saying that AD had made big mistakes in its interpretations of the sale.
Speaking at a press conference in Sliema, Mr Fenech said he could not understand the reasoning behind the government's decision to sell the shares at a 19 per cent discount on the current market price when most controlling stakes were sold at a premium in foreign markets.
He explained that when Tecom bought a 35 per cent stake in Tunisia Telecom, the company paid a price which was over 35 times the price to earnings ratio when in the case of Maltacom this was just between 14 and 15 times.
The AD spokesperson said that a strategic partner was today's biggest buzzword and that Tecom would not be investing anything into Maltacom as the company already had cash and quasi-cash assets totalling Lm26 million. He also asked why no exit dividend was proposed when this was usually the case when controlling stakes were sold.
Mr Fenech said that when the government sold its stake in Malta International Airport, the P/E ratio used was 36 times in the first tranche and 29 in the second one.
In its reply, the ministry said the sale of Maltacom's shares was higher than the average price obtained in similar transactions abroad.
There was no discount in the value of Maltacom as the price of shares at the stock exchange has no relevance in transactions in massive quantities, the ministry said.
The government made it clear that it wanted a strategic partner and not simply a financial investor. It is not a buzzword but a political choice in the interest of the nation.
The government wanted a partner that develops commercial activity and increases investment and wanted to avoid investors whose main aim would have been to sell shares it bought to recuperate expenses.
Tecom Investments was a strategic partner that has commercial interests, invested heavily in the sector and operated similar networks around the world.
The government wanted to base its negotiations on Maltacom's social obligations, and an agreement has been reached on several measures that are in the interest of the country, the company and its shareholders.