Overview

Telekom Austria to Buy T-2?

Foreign Direct Investment,  05 Sep 2011  / By Mergermarket

Telekom Austria, the listed Austrian telco, is in talks to acquire fibre cable companies in Croatia and Slovenia, a person close to the company said.

T-2, Slovenia’s second biggest telecommunications services provider after Telekom Slovenije, is the only fiber optic cable company that may currently be of interest to Telekom Austria, said two sector bankers not directly involved in the matter. “T-2 filed for insolvency in December 2010. Creditors and suppliers may want to recoup their loans and investments,” one of the bankers said.
T-2 was up for sale throughout 2010 but no potential investor agreed to take over the telco because of its outstanding debt, the other banker claimed. T-2’s new majority owner, Gratel, a Slovenian fiber optic network provider, and Lokainvest, a Slovenian telecommunications consultant, are looking for buyers, the banker said.
Gratel, which currently holds an 87 percent stake in T-2, is looking to sell its shares in order to retrieve the EUR 80m investment pumped in the company, a spokesperson for Gratel confirmed. However, she declined to comment on whether Gratel has been approached by Telekom Austria.
Lokainvest, which now owns a 12 percent stake in T-2, did not return calls for comment.
Smart Com, a Slovenian Next-Generation Network (NGN) integrator which holds a minority stake in T-2 via two legal entities, is also eager to recover its investment, Jure Remškar, Smart’s chief executive officer said. Remškar said that T-2 has seen approaches from many potential buyers, adding that Telekom Austria might be one of them.
By May 2011, T-2’s outstanding debt of EUR 247m prompted suppliers and creditors to go for a capital increase. Zvon Ena, a listed investment fund which had held a 95 percent stake in T-2, failed to participate in the capital increase, Remškar said. He added that Zvon contested the capital increase by filing a complaint with the Ljubljana Court. Remškar also noted that creditors were still negotiating over T-2’s restructuring programme. Zvon Ena did not return calls seeking comment.
The court is expected to issue its final verdict in September. “We hope that the ruling will be on our side and enable us to engage sale talks with potential buyers for T-2,” the Gratel spokesperson said.

Interest in Croatia

Metronet, the private Croatian telecommunications operator and Optima Telekom, the second largest fixed telephony and broadband services provider could also be potential acquisition targets, according to a telecommunications analyst and a banker with knowledge of the sector.
Despite their revenue growth both companies are indebted and may become targets in the near future, the banker said. Metronet’s 2010 Ebitda was EUR 8.2m, but its net loss was EUR 7.58m and its liabilities stood at EUR 79.8m, while Optima in Q1 2011 had an Ebitda growth of 18.5% (EUR 2.4m), but liabilities stood at EUR 136.73m, according to company financial statements.
Optima is 65.9 percent owned by its founder Matija Martić, while Metronet’s majority owner is Croatian Quaestus Private Equity. Optima and Metronet owners were not available for comment.
In January local press reports indicated that Telekom Austria was close to acquiring Metronet, a privately owned Croatian ISP company, but six months later Telekom Austria dismissed the rumours by saying that Metronet was not its acquisition agenda. On 6 June Telekom Austria acquired the Croatian cable operator B.net at an enterprise value of EUR 93m out of existing cash flow. The acquisition was made via Telekom Austria’s Croatian subsidiary Vipnet.
Telekom Austria is also interested in acquiring telecom companies in central and eastern Europe, both in its existing markets as well as in new markets to extend its footprint, said the person close to the company. For example, Telekom Austria would be interested in acquiring in Macedonia to boost its position and could look at the Telekom Slovenije subsidiaries in Bosnia-Herzegovina and Albania, the person said.
As recently reported by this news service, Telekom Slovenije is considering selling its Bosnian and Albanian operations.
Across the region, most of Telekom Austria’s business is mobile telephony, therefore there is scope to acquire in fixed line telephony, the person said. He confirmed that the company remains interested in Telekom Srbija, the state-controlled Serbian telecommunications group, as previously reported.
Telekom Austria could finance most buys in the region from its own resources but could look to bank financing in the case of a larger buy, the source said. Telekom Austria recently failed in an attempt to acquire 51 percent in Telekom Srbija due to differing price perceptions. The Serbian state wanted at least EUR 1.4bn, according to a previous report.
Telekom Austria had revenues of EUR 4.65bn and Ebitda of EUR 1.6bn in 2010. The company reported group revenues of EUR 1.12bn (USD 1.6bn) for Q1 2011, down 0.7 percent year on year.
In February T-2 issued a press release to announce a EUR 101m net loss for 2010 on sales revenues of EUR 44m. The long-term financial commitments of T-2 - which employs around 200 people - stood at EUR 94.3m at the end of 2010, while short-term liabilities are at EUR 153.8m, the company said in a press release.

Tags: t-2, telekom austria, gratel, zvon ena


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