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36/2011 TP Group sells TP Emitel for PLN 1.7 bn - Orange Polska

Pursuant to art. 5, clause 1, item 3 of the Decree of the Minister of Finance of 19 February 2009 on current and periodic information disclosed by issuers of securities and conditions for recognising as equivalent information required by the laws of a non-member state (Journal of Laws of 2009 No. 33, item 259, with amendments) the Management Board of Telekomunikacja Polska S.A. (“TP S.A.”) informs about concluding a significant agreement on disposal of shares of TP Emitel Sp. z o.o. (“TP Emitel”) a subsidiary of TP S.A.

TP Group signs preliminary agreement for sale of TP Emitel for PLN 1.7bn
Estimated PLN 1.2bn positive impact on TP Group 2011 profit before tax

24 March 2011: TP’s subsidiary - Bilbo Sp. z o.o. together with TP S.A. signed a preliminary sale agreement with Warsaw-based Kapiri Investments sp. z o.o., whose sole shareholder is London-based Montagu IV (B) LP, for all shares held by TP Group in Kraków-based TP Emitel, each share at nominal value of PLN 500. The shares constitute 100% of TP Emitel’s share capital, entitling to 100% voting power on the General Meeting of Shareholders.

Total purchase price amounts to PLN 1.7bn (subject to minor adjustments at closing). Value of the agreement exceeds 10% of TP S.A.’s share capital (criterion for recognising transaction as significant).

The abovementioned agreement contains the following suspensory conditions that, if not fulfilled until 31 July 2011 will result in its termination, unless parties agree otherwise:

  1. obtaining the consent from the Polish Competition Office (‘UOKiK’) by the buyer,
  2. contribution in kind made by TP S.A. of all shares of TP Emitel to Bilbo sp. z o.o.

TP Emitel’s results were fully consolidated in TP Group. The purchase price exceeds the PLN 0.5bn recognised as TP Emitel’s net assets on TP Group’s consolidated balance sheet (as of December 31, 2010). The estimated surplus in the amount of approximately PLN 1.2bn will positively impact TP Group’s profit before tax in 2011. The transaction will not impact TP Group’s cash flow target, as proceeds from sale of subsidiaries are not included in the net free cash flow measure.

Sale of TP Emitel is an element of TP Group’s strategy assuming disposal of non-core assets.

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