Czech incumbent O2 Czech Republic has reportedly been approached by its new majority shareholder, Czech investment group PPF, asking it to provide PPF with a loan worth up to CZK24.8 billion (USD1.14 billion) to help it pay off part of the debt is assumed as part of the acquisition deal. In a regulatory filing, O2 Czech Republic said: ‘Since O2 Czech Republic does not have available sufficient resources to provide the financial assistance, it is assumed that the provision of the financial assistance will be subject to obtaining the resources from external sources.’ It is understood that the telco’s board has agreed to draft the necessary measures for the approval of the financial assistance; the seven-year loan will be repaid with interest on the date it matures.
TeleGeography’s GlobalComms Database writes that in January this year Telefonica of Spain completed the sale of a majority stake in its operations in the Czech Republic and Slovakia to investment group PPF, controlled by the Czech Republic’s richest man Petr Kellner. The deal, valued at CZK63.6 billion, was cleared by the European Commission (EC) earlier that month. PPF acquired a 65.9% interest in the then Telefonica Czech Republic, which owns 100% of O2 Slovakia, and raised its stake to 73.1% in July, in a mandatory buyout offer to minority shareholders. O2 Czech Republic posted a smaller-than-expected 9.5% year-on-year decline in net profit in the second quarter, impacted by a further drop in mobile and fixed line revenue.