Telekom Austria announced an anticipated €1 billion capital increase, to raise funds it said will be used to improve its capital structure, boost infrastructure investment in its home market, as well as support potential M&A activity.
In a statement, Hannes Ametsreiter (pictured), CEO of the company, said that it will “continue our expansion with focus on convergence as well as in-market consolidation and even consider expansion via new operations”.
America Movil and Austrian state holding company OIAG have already committed to participate, and have also committed to hold onto their shares for six months after the first day of trading (expected to be 27 November 2014).
According to Reuters, just 88 per cent of new shares are accounted for by these parties, with Bloomberg stating that America Movil’s share is $750 million (€605 million).
Among the options for consolidation mooted by the operator are in-market consolidation to strengthen existing businesses, and the expansion of its “convergence strategy” to augment markets where it is currently “mobile-only”. It will also explore “expansion via new operations”.
Earlier this year, the head of OIAG described Telekom Austria’s financial position as “precarious”, following a €400 million write-down associated with its Bulgarian unit. In a statement, the operator said it is targeting a credit rating of at least BBB (stable) by Standard & Poor’s.
Telekom Austria recently inked a deal to merge its Macedonian assets with those of Telekom Slovenije, in a deal that will create an emboldened rival for Deutsche Telekom-owned Makedonski Telekom.