Petr Kellner mulling sale of O2 Czech Republic stake?

6 Jun 2016

PPF, the privately held financial group controlled by Czech billionaire Petr Kellner, is reportedly considering options to sell a stake in its majority-owned telecoms asset O2 Czech Republic, reports Bloomberg citing people familiar with the situation. According to sources, who asked not to be named due to the sensitivity of the information, PPF is weighing up whether or not to sell either part or all of its 83.27% stake in O2 Czech Republic, the firm it took control of when it acquired Telefonica of Spain’s 65.90% holding in January 2014. No final decisions have been made, however, and PPF may decide not to proceed if it feels it will not get a good price for the unit. Meanwhile, another source reportedly says that the investment group would also consider a tie-up with a minority shareholder – on a long term basis – with a view to the co-development of the telco’s infrastructure business. When asked to comment, O2 Czech Republic spokeswoman Zuzana Migdalova simply said: ‘We are not in talks with any banks in the sense of your speculation.’

O2 Czech Republic reported a 44.5% year-on-year increase in net profit to CZK5.077 billion (USD204.4 million) for the year to 31 December 2015, which it claims shows that its long term business strategy is working. The group’s consolidated results, which include its O2 Slovakia subsidiary but not those of spun-off infrastructure business Ceska telekomunikacni infrastruktura (CETIN), showed that full year revenue was stable at CZK37.385 billion and EBITDA climbed 24.7% y-o-y to CZK10.142 billion. Growth across the operation was fuelled by mobile data, its O2 TV business and O2 Slovakia itself, it said, prompting CEO and Chairman Tomas Budnik to say: ‘2015 was a breakthrough [year] for our company. We were the first globally to voluntar[il]y spin off our fixed and mobile infrastructure. And seven months of independent operation have [confirmed that our assumptions on the benefits] we identified in our analyses [were correct].’ The O2 CR official went on to point out that the new strategy plan reversed a seven-year run of revenue decline at the company, and increased profitability significantly, while still generating increased free cash flow in 2015 (up 31%) and increasing CAPEX for 2015 and on into 2016.

Czech Republic, O2 Czech Republic (incl. CETIN), PPF Group