Venezuela Buys Controlling Stake in Main Telecomm Co.

CARACAS, Venezuela — President Hugo Chavez’s government on Wednesday said it has bought a controlling stake in Venezuela’s largest telecommunications company for $1.3 billion as the country moves ahead with its nationalization drive.

The government raised its stake in CA Nacional Telefonos de Venezuela to 86.2 percent from a previous 6.6 percent after buying shares through tender offer on the stock exchanges in Caracas and New York.

"Now CANTV, in effect, passes to the hands of the state. All that is left for us now is to complete a simple formality," Telecommunications Minister Jesse Chacon said.

He said the oil-rich government is spending $1.3 billion to expand its stake, which will be paid off on May 18.

A new board of directors and company president will be appointed by the government at a May 21 shareholder meeting, "and from that moment on CANTV will be truly Venezuelan at last," Chacon said.

The total payment includes $572 million that Venezuela agreed in February to pay New York-based Verizon Communications Inc. for its 28.5 percent stake.

Chavez is also nationalizing electric utilities as part of what he calls a transition to a socialist economy. His government earlier this month also took over multibillion-dollar oil operations from major foreign oil companies.

Chacon said CANTV employees _ who number nearly 13,000 _ will continue to own 5.7 percent of shares while nearly 8.1 percent is to remain in the hands of private investors.

Asked if some of those shares will continue to be traded on the New York Stock Exchange as American depository shares, Chacon said that would depend on U.S. regulations since delisting would be automatic if the number of shareholders falls below 300.

The company’s shares, which were last quoted at $14.75, were not trading Wednesday on the New York Stock Exchange.

Spain’s Telefonica has held 6.9 percent of shares recently, and it was not immediately clear what became of those shares.