Romania tells OTE to cut debt before allowing legal merger of Telekom Romania fixed/mobile units

12 May 2016

Greek telecoms group OTE must reduce debt significantly at subsidiary Telekom Romania Mobile Communications (formerly Cosmote Romania) before being permitted to complete the cellco’s planned legal merger with sister fixed network operator Telekom Romania Communications (formerly Romtelecom), it has been told by Romania’s Ministry of Communications & Information Society (MCSI), according to market sources close to the MCSI quoted by local business daily ZF. The ministry, a part-owner in the Telekom Romania group, was cited as telling OTE – itself 40% owned by Germany’s Deutsche Telekom – that it must delete EUR600 million (USD684 million) of a total EUR850 million-plus debt stemming from losses at the Romanian cellco (operating under the ‘T’ brand of the Deutsche Telekom group) as a condition of the merger of the fixed/mobile divisions, which are already operationally integrated.

Telekom Romania Communications is owned by OTE (54.01%) and the Romanian communications ministry (45.99%), whilst Telekom Romania Mobile Communications is owned by OTE (70%) and Telekom Romania Communications (30%).