KPNQwest rubbishes want-away owner rumours

NEWS KPNQwest yesterday assured investors that its co-owner KPN Telecom NV will not be able to offload its 44.3 per cent stake in order to reduce its own debt. KPNQwest's share price dropped by 23 per cent on the back of speculation stemming from comments made by KPN chief executive, Paul Smits. Smits said at his company's second quarter earnings release on Monday that he was looking at all options, excluding only the sale of its fixed line network, to reduce net debt of $20.7bn. KPNQwest retaliated by stating that as agreed at the venture's conception (jointly held by KPN and US long distance carrier, Qwest Communications International), neither party is allowed to transfer shares unless to an affiliate, without the agreement of both parties, until 1 April 2004. Qwest has the right to veto any sale. However, if it agrees KPN's shares become 'C-class' status shares with one tenth of the original voting power, so the new owner would have no voting power. A statement from KPNQwest investor relations said it will be very difficult for KPN to sell before the approved date.