MTel to sell Montenegrin unit for EUR 123.5 mln

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Magyar Telekom, the Hungarian subsidiary of Deutsche Telekom, has signed an agreement to sell its 76.5% stake in Crnogorski Telekom, its unit in Montenegro, to Croatiaʼs Hrvatski Telekom for EUR 123.5 million, according to Hungarian news agency MTI.

Both buyer and seller are majority owned by Deutsche Telekom, which holds 59.2% of MTel and 51.0% of Hrvatski Telekom, according to MTI. MTel acquired the stake in Crnogorski Telekom in the spring of 2005. 

“The disposal of this stake is in line with Magyar Telekom’s renewed focus on its Hungarian operations, where efforts are underway to further strengthen the company’s position in the mobile market and its ICT capabilities, alongside maintaining investment in our fixed networks and raising penetration levels in those areas already served by high-speed internet access,” MTel said in a statement published on the website of the Budapest Stock Exchange, according to the news agency.

MTel expects the sale to accelerate the reduction in its net debt ratio, bringing it within the target range of 30-40% by March 2017, from 41.6% at the end of Q3 2016, MTI reported. As a result of the transaction, MTel reduced its guidance for revenue this year from HUF 585-595 billion to HUF 560-570 bln, and cut EBITDA guidance from about HUF 189-193 bln to HUF 181-185 bln. It now sees capital expenditures declining 15%, compared to 10% earlier.

The BUX index was around break-even until 11 in the morning, when MTel announced the sale, after which the BUX rose by 0.44% to 32,998.23. MTelʼs share price climbed from HUF 512 before the announcement to HUF 519 around noon, up 1.76%, MTI reported. Turnover of MTel shares reached HUF 1.4 bln in the morning, even outpacing the turnover of OTP Bank, usually the bourseʼs most-traded share.

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