"The government needs to explain its position to the owners of this company, the shareholders, and present a plan of, 'this is how we will proceed and how much we offer to pay', etc.," Armando Yanes, head of CANTV's finance said.

Chavez announced Monday that he plans to nationalize CANTV, along with the electricity industry. Company executives have no idea what the government plans, Yanes said, or how this nationalization would come about.

"We don't know if the government considers that a majority stake in the company would constitute a nationalization and we really don't want to speculate," Yanes said.

The government has not contacted the company and executives have not discussed the decision with Carlos Slim, who is bidding to purchase a stake in the company. Slim's bid for the shares owned by Verizon is a transaction between two shareholders and the company's management has no role in that deal, Yanes said. Slim offered to purchase a 28.5% stake in CANTV for US$ 676.6 million, but regulators have yet to make a decision on the matter.

Last year, Chavez said he would nationalize CANTV if the company failed to resolve a pension dispute with workers. The company recently appealed a decision by a judge that would force CANTV to make higher back payments to workers than originally anticipated. Yanes said the company has largely rejected the judge's ruling but has agreed to cover that back payment for 4,300 workers only. In the end, Yanes said, the total cost of upgrading pensions to the minimum wage and covering back payments for a fraction of the workers would mean a slightly higher cost than originally anticipated. Last year, CANTV set aside US$ 387.4 million to cover the cost of upgrading pensions as dictated by a Supreme Court ruling.

CANTV, formerly a state-owned company, was privatized in 1991, before Chavez took office. Chavez has long argued that the decision to privatize the company was a mistake.

Source: Dow Jones - WDR/Intelecon Regulatory News