March 21 (SeeNews) - Norwegian telecommunications group Telenor said on Wednesday it has agreed to sell its Central and Eastern European (CEE) assets to Czech-based investment group PPF for 2.8 billion euro ($3.43 billion) on an enterprise value basis.
The transaction includes Telenor's wholly-owned mobile operations in Hungary, Bulgaria, Montenegro and Serbia and the technology service provider Telenor Common Operation, it said in a statement.
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The CEE operations contributed approximately 11.8 billion Norwegian crowns ($1.52 billion/1.24 billion euro), or 9% of Telenor Group's revenues and 4.1 billion Norwegian crowns, or 8% of EBITDA in 2017. They have more than 9 million customers and around 3,500 employees.
"With the sale of our CEE assets, we take an important step in simplifying and focusing Telenor's portfolio on the regions where we see the strongest potential for value creation.[...] Telenor is confident that PPF Group's experience in both the region and sector will make it a good owner of the CEE assets," Sigve Brekke, Chief Executive Officer of Telenor Group, said in the statement.
On its annual general meeting (AGM) in May, Telenor Group plans to seek a special dividend payout of 4.40 Norwegian crowns per share, contingent upon the successful closing of the transaction as an addition to the proposed ordinary dividend of 8.10 Norwegian crowns per share for 2017. The total proposed pay-out to shareholders in 2018 will be approximately 19 billion Norwegian crowns.
The company also plans to ask the AGM for a new buyback mandate to secure flexibility for additional shareholder remuneration going forward.
"With this purchase, PPF Group is expanding its telecommunications portfolio to four more countries, and fulfilling our long-held goal to become a mid-sized European operator and to use our experience to strengthen our market position," said Ladislav Bartonicek, PPF Group's shareholder responsible for telecommunications assets within PPF.
The parties have agreed on a deferred purchase price, where 400 million euro of the proceeds will be paid in four instalments over four years.
The transaction which is expected to be completed in the third quarter of 2018, requires necessary regulatory approval.
PPF Group is a private investment group, operating in CEE with approximately 35 billion euro of assets under its control. PPF Group invests in various sectors, including banking, consumer finance, real estate, mining and telecommunications. In February, PPF signed an agreement with Sweden's Modern Times Group (MTG) to acquire media company Nova Broadcasting Group in Bulgaria.
Telenor has had mobile operations in the CEE region for 25 years. Telenor entered the Montenegrin market in 1996 through the launch of mobile services in the country. Later, in 2006, it acquired Mobi 063 in Serbia. Telenor acquired Globul in Bulgaria in 2013.
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