O2 Czech Republic has decided to move ahead with the spinoff of its fixed and mobile infrastructure into a separate company.
Having completed an analysis into the feasibility of the plan, the Prague-based telco said in a statement that it will prepare…
O2 Czech Republic has decided to move ahead with the spinoff of its fixed and mobile infrastructure into a separate company.
Having completed an analysis into the feasibility of the plan, the Prague-based telco said in a statement that it will prepare “formal steps leading to such separation”.
O2 CR, majority-owned by Czech billionaire Petr Kellner’s PPF, confirmed last August that it was considering the separation, which would see the new company provide wholesale services to other local telcos. It has already informed the national telecoms regulator about its plans.
It is not yet clear whether the spinoff would lead to a sale of the assets.
Josef Nemy, an analyst with Komercni banka in Prague, said he would assume that O2 CR would retain ownership of the new company. In his view, the spinoff could improve efficiencies for the telco which might slightly improve its profitibility.
It might also give PPF greater opportunities for divestment in future, he noted, adding that it could be easier to sell just a part of the company.
On the other hand, the separation could lower the telco’s dividend policy, which would be a negative for minority shareholders, he said.
“If O2 CR sells the separated [company], it is quite likely they will use the proceeds to repay debt and not for dividends.”
The decision to proceed with the separation comes less than a month after O2 CR shareholders approved a seven-year loan of up to Kc24.8bn (US$1.1bn) to PPF, which has built an 83% stake in the telco since closing its acquisition of a majority stake from Spain’s Telefonica in January 2014.
As O2 CR does not have enough funds at hand to provide the loan itself, the operator will seek to obtain a syndicated loan of up to Kc31.8bn (US$1.4bn) with a maximum six-year maturity, using the remaining proceeds to consolidate its own debt and fund business operations.
New chairman
Meanwhile, O2 CR has appointed CEO Tomas Budnik as chairman following Luis Malvido’s departure from the company at the end of 2014.
Tomas Kouril is the new vice chairman. The changes, effective from today, follow on from PPF taking control of the telco.
O2 CR reported consolidated operating revenues of Kc33.07bn (US$1.41bn) for January to September 2014, down 7% year-on-year. OIBDA was down 10.6% year-on-year to Kc11.8bn (US$503.92m).
