Greece based OTE has announced the sale of its 20% stake in Telecom Serbia for EUR380 million (US$491 million). OTE will additionally receive a minimum dividend of EUR17 million for fiscal year 2011.

OTE Chairman and CEO, Michael Tsamaz, stated: "Today we signed a mutually beneficial agreement. I would like to thank Telecom Serbia's management and employees for the company's accomplishments to date as well as the good cooperation with the Ote Group. The sale of Telecom Serbia will have a positive impact on our cash flow and is part of our strategy to reduce OTE's net debt."

OTE has debt maturities of EUR756 million of debt due in 2012, and EUR2.1 billion in 2013.

The transaction is expected to be completed by the end of Q1 2012 and is subject to fulfilment of agreed conditions precedent.

OTE originally bought the 20% stake in 1997, but has been unable to increase the holding to management control, or push through necessary economies at the subsidiary.

The Serbian government had offered to sell the remainder of the company in 2010, but OTE lacked the financial muscle to approve the purchase. The Serbian government is still looking to sell the company, but would find it easier to sell if it owned the whole company.

Deutsche Telekom owns 40% of OTE.