Hungarian IT-cum-media company econet.hu on Thursday said it is in advanced talks on the sale of its 76.83% stake in telecommunications company Externet to a company headed by Géza László, the former CEO of Antenna Hungária and Danubius Rádió.
The contract on the sale is being prepared, but must still be approved by the board as well as by Externet's financing bank Commerzbank, econet.hu said.
The purchase price will be significantly lower than the share price - Externet shares, one of the Budapest Stock Exchange's “sleepers,” closed at HUF 410 on Monday, the last day the shares changed hands - because of the illiquid share market; difficulties on the telecommunications, and especially broadband internet, market; the effects of the global crisis on financial and capital markets; and the fact that Externet shares have been put up as collateral for bank loans.
econet.hu said it was hit harder than expected by the global crisis and saw neither bank loans nor share issues as realistic options should the company require fresh capital. The sale would cut econet.hu's bank debt sharply as Externet accounts or about two-thirds of the group's HUF 1 billion of bank loans. It would also allow econet.hu to concentrate on its media activities.
econet.hu, itself listed on the Budapest Stock Exchange, floated Externet's shares in May 2008. At the time of listing, Externet was owned by econet Invest (76.83%), Vivacom Magyarország (12.69%) and Kraft Invest (10.48%). (MTI - Econews)