Market turmoil delays Lebanon telecom sale

Beirut: The sale of two state-owned Lebanese mobile phone firms might be held up because of the global financial crisis and economic downturn, the head of Lebanon's privatisation council said.

Ziad Hayek said a delay in the long-planned sale would allow time for parliament to issue a new law demanded by some politicians to allow the privatisation to go ahead.

"The financial markets and stock markets are not in a fit state to complete this operation at present," he said in an interview, a copy of which was released by his office on Friday.

"They will not allow us to obtain the amount we had hoped for from the privatisation," he said in the interview with Al Masira magazine.

Hayek has previously declined to say how much the sale is expected to yield for the government. The proceeds will be used to pay off some of a public debt mountain of $44.5 billion (Dh163.5 billion) - equal to around 170 per cent of gross domestic product.

Under existing plans, the sale of majority stakes in both firms will be followed by an IPO offering a remaining third of each company. International donors have linked plans to speed up the dispersal of funds pledged to Lebanon to the execution of reforms including privatisation.

The sale had initially been planned for February but was delayed because of a political conflict that paralysed government and pushed the country to the brink of civil war.

The conflict was resolved in May by a Qatari-mediated deal which led to the formation of a national unity government.

New legislation

Hayek said Telecommunications Minister Gebran Bassil, who took office in the new cabinet in July, supported Parliament Speaker Nabih Berri's idea of the need for new legislation before the privatisation could go ahead.

A Justice Ministry commission had previously ruled that no new legislation was required, Hayek said. The new law would most likely be passed next year, he added.