Hungarian telecommunications company Magyar Telekom has signed a share-purchase agreement to sell its fully owned Bulgarian subsidiary, the alternative telecommunications company Orbitel EAD, to Spectrum Net AD, Magyar Telekom announced on the website of the Budapest Stock Exchange on Tuesday morning.
The transaction set the net assets value of Orbitel at around €5 million. Magyar Telekom said that the company had decided to withdraw from Bulgaria's alternative retail-telecommunications market and focus its operations on businesses with more lucrative prospects.
The deal is subject to local competition office approval and is expected to close by the end of the first quarter of 2010.
Orbitel is expected to generate revenue of approximately €10 million and EBITDA of €1 million in 2009. Magyar Telekom expects the transaction to generate cash flow of around €3.5 million in the first quarter of 2010. The remaining part of the purchase price is in obligations undertaken by the buyer. (MTI-Econews)