There was no time for champagne after Sigve Brekke, chief executive of Norwegian telecoms firm Telenor, signed off on the sale of the state-controlled company’s mobile phone operations in Hungary, Bulgaria, Serbia and Montenegro last week. “We settled for a glass of water,” Brekke told newspaper Dagens Næringsliv (DN).
The Telenor CEO was nonetheless pleased with the deal that was valued at nearly NOK 27 billion. (EUR 2.8 billion). It means that 9 million mobile phone customers will disappear from Telenor’s portfolio, but it also results in an extraordinary dividend to investors (including the Norwegian government) of nearly NOK 7 billion. Telenor’s accounts will also log a gain of NOK 3 billion, reported DN.
Brekke and his colleagues had negotiated the sale to the Czech ivestment fund PPF Group for several months. Telenor’s mobile operations in Eastern and Central Europe had not been for sale, because they generated “good cash flow” for the company, according to Brekke.
“But we received an offer for all four mobile operation in the area and thought it was interesting,” Brekke told DN. PPF Group is the largest private investment group in the region, controls holdings valued at EUR 35 billion and there was no bidding.
Brekke thinks Telenor, which retains mobile operations in Scandinavia and Asia, received “a fair price” and noted that the company will use its own gain to buy mobile frequencies and invest in infrastructure, “to grow in the markets where we are.”