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Telenor officially sold its business to Czech billionaire

Staff Writer |
Telenor has entered into an agreement to sell its assets in Central and Eastern Europe (CEE) to PPF Group for EUR 2.8 billion (around NOK 27 bn) on an enterprise value basis.

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The board of directors of Telenor intends to ask the Annual General Meeting (AGM) for authorisation to distribute a special dividend of NOK 4.40 per share.

The transaction includes Telenor’s wholly-owned mobile operations in Hungary, Bulgaria, Montenegro and Serbia and the technology service provider Telenor Common Operation.

The CEE operations contributed approximately NOK 11.8 billion or 9% of Telenor Group’s revenues and NOK 4.1 billion or 8% of EBITDA in 2017, and have more than 9 million customers and around 3,500 employees.

The board of directors will ask the upcoming AGM on 2 May 2018 for power of attorney to pay out a special dividend of NOK 4.40 per share, contingent upon the successful closing of the transaction.

Including the proposed ordinary dividend of NOK 8.10 per share for 2017, the total proposed pay-out to shareholders in 2018 will be approximately NOK 19 billion.

As previously communicated, the company also plans to ask the AGM for a new buyback mandate to secure flexibility for additional shareholder remuneration going forward.

PPF Group is the largest private investment group in CEE with approximately EUR 35 billion of assets under its control. PPF Group invests in various sectors, including banking, consumer finance, real estate, mining and telecommunications.

Previous transaction experience includes the acquisition of O2 Czech Republic from Telefonica in 2013 and Nova Broadcasting Group in Bulgaria in 2018.

The agreed transaction price corresponds to an EV/EBITDA multiple of 6.4 based on 2017 EBITDA.

The parties have agreed on a deferred purchase price, where EUR 400 million of the proceeds will be paid in four instalments over four years.

The transaction requires necessary regulatory approval. The transaction is expected to be completed within Q3 2018.

As of first quarter 2018, the CEE operations will be treated as an asset held for sale and discontinued operations in Telenor Group’s financial reporting.

The transaction is estimated to result in an accounting gain after tax of around 3 NOK billion to be booked after the completion of the transaction.

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