PPF selling 30 pct in CETIN to investment fund GIC
The PPF group and Singapore-based investment fund GIC have agreed that GIC will acquire a 30-percent stake in telecommunication network operator CETIN Group, while PPF will retain a 70-percent majority, PPF announced.
The deal is yet subject to approvals of respective regulators and parties have agreed not to disclose the financial details of the transaction. The new minority owner will have an appropriate representation on CETIN's board of directors, according to PPF.
"As a long-term investor, we are confident that the digital infrastructure sector will continue to grow robustly and CETIN, as the leading telecom platform in Central Eastern Europe, is well positioned to capitalize on that growth," GIC's chief investment officer Ang Eng Seng said.
"GIS is committed to building a long-term partnership with PPF and CETIN," he added.
"PPF is proud to partner with GIC, a major and respected international investor," said PPF CEO Ladislav Bartonicek.
According to PPF, the transaction underscores the confidence among major international investors in its strategy of building and operating complex fixed and mobile telecommunications networks and providing infrastructure as a service to retail operators.
CETIN CEO Juraj Sedivy said he expected the partnership with GIC to open new possibilities and growth opportunities in the telecommunications infrastructure market for CETIN.
"In our opinion, the new strategic partner in the CETIN group means that the chance of the firm's entering the public (stock) market is falling markedly or is gone entirely," J&T Banka analyst Milan Vanicek said, commenting on the transaction.
According to analyst Radim Dohnal of the Capitelinked.com server, the deal is proof that PPF either believes that this sector is near the top or that it fears regulatory and tax interventions.
"In such a case it is convenient for it to be partnered with a government fund from a prominent country which is one of 11 countries that have received the AAA Rating from S&P. I do not know whether PPF is also driven by a need to raise additional funds for (its lender arm) Home Credit, but it is possible," said Dohnal.
"Consolidation and streamlining of telecommunication assets are coming to an end, as (Czech telecom company) Ceske Radiokomunikace belongs to a fund from the British island of Guernsey and CETIN to a fund from Singapore. Asset transfers of (mobile operators) O2 or T-Mobile cannot be ruled out in the forthcoming years either," said Dohnal.
CETIN came into existence in 2015 through a split of infrastructure from telecommunications operator O2. It turned into a group in 2020 when telecom infrastructure was separated from operators operating under the Telenor brand in Bulgaria, Hungary and Serbia. They are part of PPF's portfolio since 2018.
CETIN is a leading wholesale provider of active and passive telecommunication infrastructure services in Central and Eastern Europe. It operates O2's mobile and fixed networks and data centres. O2 has been part of PPF since January 2014.
As of March 31, 2021, CETIN was the largest infrastructure provider in Czechia with a 34-percent market share and the second-largest in Hungary, Serbia and Bulgaria.
Members of the CETIN group generated total revenues worth about EUR 874m (over CZK 22bn) last year and made a profit of EUR157m (some Kc4bn). The Czech arm of CETIN posted a profit worth almost CZK 2.5bn
PPF invests in a number of sectors, including financial services, telecommunications, media, real estate, biotechnology and engineering. It is active in 25 countries in Europe, Asia and North America. It owns assets worth EUR 39.7bn (about CZK 1,000bn) and employs 94,000 people worldwide. PPF Group N. V., a key company of the group, is based in Amsterdam.
In 2020, the group sank into a loss of EUR 291m (CZK 7.42bn) from 2019's net profit of EUR 1.005bn (CZK 25.5bn), spokesman Leos Rousek said earlier.
Photo: PPF CEO Ladislav Bartonicek
Source: CTK
