O2 Czech Republic shareholders have approved providing a seven-year loan of up to Kc24.8bn (US$1.1bn) to their majority shareholder, investment firm PPF.
Petr Kellner’s PPF requested the loan in October to help repay the bank debt it took on to…
O2 Czech Republic shareholders have approved providing a seven-year loan of up to Kc24.8bn (US$1.1bn) to their majority shareholder, investment firm PPF.
Petr Kellner’s PPF requested the loan in October to help repay the bank debt it took on to acquire a majority stake in the telco earlier this year.
As it does not have sufficient funds to provide the loan itself, O2 CR will seek to obtain a syndicated loan of up to Kc31.8bn (US$1.4bn) with a maximum maturity of six years, the telco said in a statement.
The Prague-listed operator will use the remaining proceeds to consolidate its own debt and fund business operations.
O2 CR vice chairman and CEO Tomas Budnik said the board of directors believes that granting PPF’s request for financial assistance will increase the telco’s value for all shareholders, noting that, as part of the PPF group, it potentially now has access to external financing with better terms, including lower costs.
O2 CR announced in late November that it was considering taking out the Kc31.8bn loan, saying the amount would be split between term and revolving loans. It would be in either Czech crowns or euros and, based on current market conditions, have an interest rate of between 1.35% and 1.75% per annum.
KPMG provided an independent assessment of the O2 CR’s report on the planned loan, concluding that it had not seen anything to suggest it would not be in the telco’s interests.
Netherlands-based PPF has built an 83% stake in O2 CR since closing its Kc63.6bn (US$3.32bn) acquisition of a 65.9% stake in from Spain’s Telefonica in January. Analysts have said they expect the investment firm to eventually aim to take full control of the company.
