Telekom Austria has unveiled its long-awaited rights issue which aims to raise €1bn (US$1.24bn).
The Austrian incumbent will issue up to 221.5 million new shares from 10 November to 24 November and its two main shareholders, which together own 88.12%…
Telekom Austria has unveiled its long-awaited rights issue which aims to raise €1bn (US$1.24bn).
The Austrian incumbent will issue up to 221.5 million new shares from 10 November to 24 November and its two main shareholders, which together own 88.12% of the operator, have committed to take part in the capital increase.
America Movil, which owns 59.7% of Telekom Austria, will buy about 132 million new shares at the €4.57 offering price, injecting €604m (US$750m) into the telco.
The purchase keeps America Movil’s stake in Telekom Austria – which it holds directly and indirectly through Carso Telecom – at the same size.
The Mexican giant bought into Telekom Austria in 2012 and had hoped to use it as a starting point to develop its business in Central and Eastern Europe, although the planned expansion has not yet happened.
Austrian state holding company OeIAG, which holds 28.42% of Telekom Austria, also pledged to buy shares commensurate to its existing stake. It will inject €288m (US$357m) into the business by acquiring 63 million shares to maintain its ownership level and support the operator.
That leaves 26.5 million shares to be sold on the open market, which would raise the final €108m (US$133m).
Citigroup and Deutsche Bank are acting as joint global coordinators and joint bookrunners, while Erste Group, Raiffeisen and Unicredit are acting as joint bookrunners.
Telekom Austria will use the proceeds from the offering to re-establish its target capital structure and maintain a credit rating of at least BBB (stable) with Standard & Poor’s.
Telekom Austria shareholders approved the capital increase in August. America Movil and OeIAG both committed to supporting the capital hike back in April. Rumours of a capital increase have been circulating since summer 2013.
In a statement today, the telco said this will allow to “pursue strategic investment priorities with the aim to strengthen the Telekom Austria Group’s operational performance and to return to a sustainable growth profile within the stated sound financial framework”.
The operator plans to put a particular focus on rolling-out fibre infrastructure between next year and 2018, and said a healthier capital structure would allow it to look at mergers and acquisition opportunities.
Telekom Austria pointed to in-market consolidation as being its priority, followed by convergence deals and lastly looking into new areas.
