Deutsche Telekom (DT) is prepared to help Greece’s OTE repay a debt pile of about €4.9bn (US$6bn) by lending funds or buying its Bulgarian unit Globul.
DT CFO Timotheus Hoettges told analysts during a conference call on the German incumbent’s…
Deutsche Telekom (DT) is prepared to help Greece’s OTE repay a debt pile of about €4.9bn (US$6bn) by lending funds or buying its Bulgarian unit Globul.
DT CFO Timotheus Hoettges told analysts during a conference call on the German incumbent’s H1/2012 financial results that it would assist OTE with its refinancing strategy, which includes the potential sale of Globul and electronic goods supplier Germanos Telecom Bulgaria, if necessary. When asked whether DT might buy Global, he replied “of course we could”.
However, Hoettges was keen to stress OTE is doing a good job of refinancing debt independently, noting the Greek incumbent is currently financed until the end of August 2013.
“In the unlikely case of [OTE] not having its own access to the capital market, which I do not see, we always said then refinancing has to take place at arm’s length,” he said.
DT has a 40% stake in OTE and, in its half-year report, said the Greek telco “recorded remarkable efficiency gains, with its adjusted EBITDA margin increasing by 2.2 percentage points year-on-year to 36.4% in the second quarter of 2012 thanks to successful cost-cutting measures”.
OTE reported total revenue of €1.6bn for the first half of 2012 – down 5.8% from €1.7bn in the first half of 2011. Its total debt stood at €4.9bn – down 3% from 30 June 2011. The company reported its underlying net debt declined by 22.4% (about €1bn) year-on-year to €3.2bn, helped by the sale of its stake in Telekom Srbija earlier this year.
In its half-year 2012 report, OTE said it expects further pressure on revenues in the latter part of the year “as challenging macroeconomic and competitive conditions are exasperated by regulator-mandated termination cuts in most of the markets in which the group operates.
“Continued stringent implementation of OTE’s cost-containment programs should enable the group to mitigate the impact of revenue declines on its profitability and financial performance.”
An OTE spokesperson confirmed in late June that the company intended to launch formal sales processes for both Bulgarian units. OTE has reportedly hired Citigroup to advise it on the matter and the bank has already approached several telecoms operators, including Turkcell, Vodafone and France Telecom.
