Magyar Telekom sues BTel for HUF 944 mln

In Hungary

Budapest Stock Exchange (BSE) issuer Business Telecom (BTel) said late yesterday that Magyar Telekom was suing it for HUF 944 mln in service fees and related taxes, and an investor has initiated liquidation procedure against the company but a deadline given by the court has not expired.

BTel said that the Kecskemét court gave it 45 days to pay dues to an investor that has initiated liquidation procedures, and it plans to settle the debt during the period. BTel cited BSE regulations which requires an announcement in such a case only after a non-appealable ruling, explaining why it did not report the procedure.

BTel agreed in April with the investor in question to make principal and interest payment on a bond at a later date, adding that it had an obligation to buy 230,000 BTel ordinary shares related to the agreement.

The issuer noted that it made announcement on the above deal as well as on the late payment brought by Magyar Telekom to court before. (The earlier report did not mention the size of the claim.)

The announcement made on Wednesday also clarified an April option agreement and noted that the liquidity measure in the company's Q3 report, showing a 21-22% improvement in one year, was correct, and reflected the redemption of a bond. Missing some payment deadlines did not affect the liquidity measure which does not reflect the actual cashflow position but rather the change over a period, BTel said.

The BSE on Tuesday fined Business Telecom (BTel) HUF 3m and requested it to comply fully and on time in future with disclosure regulations and to immediately settle its debt towards the bourse. Last week the National Bank of Hungary fined the company HUF 3.5m for failing to comply with disclosure regulations.

About 10 days ago BTel's shares were removed from the bourse's main BUX and BUMIX index because of the shortfalls.


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