Reuters reports that last Friday, the board of directors of O2 Czech Republic agreed a plan to spin off the telco’s infrastructure assets into a standalone business worth an estimated USD1.9 billion. The fixed line and mobile operator, which has been seeking ways to turn the business around amid intense competition in the Czech telecoms market, says the move will see shareholders receive one share in the new Ceska Telekomunikacni Infrastruktura – comprising O2’s fixed and mobile networks – for each O2 Czech Republic share held. Post-demerger, the rump of O2 Czech Republic’s business will continue to operate as a retail business, offering a complete range of voice, data and TV-based services. Shares in the new business will not be listed and each O2 Czech Republic share, with a nominal value of CZK87 (USD3.55), will be reduced to CZK10. Any treasury stock will be cancelled as part of the transaction, it said.
As reported by TeleGeography’s GlobalComms Database, in January this year the Czech incumbent decided to hive off its fixed and mobile infrastructure operations, and confirmed it was taking ‘formal steps leading to such separation’. It was August 2014 when rumours first emerged that O2 CR majority shareholder PPF Group was considering plans to split O2 Czech Republic into two parts. Under the plan, PPF said it would hive off the telco’s fixed line and infrastructure business into one entity, while setting up a separate business covering its mobile and other services. The plan has now been approved by the supervisory board, but it still requires the shareholder backing. It is understood that shareholders will also be offered the opportunity to sell their shares in the unlisted infrastructure business under certain conditions.
Further, Reuters notes that the pending demerger has put an end to a proposal that O2 CR provide PPF Group with a loan of CZK24.8 billion to cover part of the original acquisition cost of the company, although PPF may yet seek a similar loan from one or both the companies that emerge after the split, the telco said.