• Loading stock data...
 Digi Romania Acquires Majority Stake in Telekom Romania Mobile


Digi Romania Acquires Majority Stake in Telekom Romania Mobile

Romania’s major telecom group Digi Romania (DIGI) on Monday announced that it has reached an agreement to get indirect majority control of Telekom Romania Mobile – the local mobile operator and the last asset of the Greek group OTE that took over the country’s incumbent telecom group Romtelecom.

As part of the deal, Digi Romania will acquire West Network Invest S.R.L., an investment vehicle majority-owned by Digi and minority-owned by Clever Media group, of a 99.99% stake in Telekom Romania Mobile Communications, from Hellenic Telecommunications Organisation (OTE).

The completion of the Transaction is subject to several conditions, including the finalisation of the due diligence process, obtaining the necessary approvals from competent authorities among others, Digi’s CEO Serghei Bulgac said.

According to the agreement between the shareholders of West Network Invest, in the event the transaction is completed, Telekom Romania Mobile will remain in the market as an independent telecommunications operator.

The deal is a second version of the preliminary agreement announced last November by OTE. Last year on November 21, OTE informed investors in a note that it was in talks to sell the mobile operator to Quantum Projects Group – a vehicle owned by Romanian businessman Adrian Tomsa, who, under the final agreement announced by the Romanian telecom group Digi on May 27 is only a minority partner of Digi in the takeover vehicle.

The parties signed a memorandum of understanding to facilitate the process and submitted it for approval to the competent Romanian authorities, Digi Communications said.

On November 23, Tomsa said that he would obtain the necessary approvals from the National Security Council (CSAT) and the competition body for the transaction.

“We trust that the institutions of the Romanian state will favourably analyse this transaction as soon as possible, as all the necessary documents have already been submitted in this regard,” he said at that time.

Tomsa even pledged to transform Telekom Romania Mobile into a local, dynamic, safe operator, dedicated to all domestic residential customers. Telekom Romania Mobile reported $283.69 million in revenues and $17.39 million net losses in 2023.

Huge Losses

The company, which has 3.66 million active SIMs at present including 1.93 million post-paid subscribers, has reported net losses in nine of the past ten years. In total, there are nearly 24 million active SIMs, of which two-thirds are for post-paid services.

It may be recalled that on 6 November 2020, OTE agreed to sell the 54% stake in the fixed network company Telekom Romania Communications to Orange Romania for $320.64 million while the Romanian government owned the remaining 46%.

In order for the transaction to be approved by the authorities, OTE has committed to buy the remaining 30% of shares in Telekom Romania Mobile. The transaction was completed in July 2021.

Global Business Magazine

Global Business Magazine

Related post

Leave a Reply

Your email address will not be published. Required fields are marked *