Emirates International Telecommunications (EIT) and GO of Malta, 60 per cent owned by EIT, have, through their special purpose JV Forgendo, increased their stake in Greece’s leading alternative broadband operator Forthnet to 34 per cent.
This takes the company’s total investment value in Forthnet to Dh1.1 billion ($299.4 million). The stake increase follows the acquisition by Forgendo of a 21 per cent stake in Forthnet earlier this year.
This investment allowed Forthnet to purchase NetMed, which owns the Nova brands in Greece and Cyprus, the only premium pay TV operators in their respective markets. The investment creates the first converged Pay TV and broadband player in Greece.
NetMed (Nova) is the only premium pay-TV company in Greece, delivering its services via satellite. It has strong growth potential since pay-TV penetration in Greece is significantly lower than in other European countries, said a top company official.
Deepak Padmanabhan, chief executive officer of EIT, said: “By increasing our total stake to 34 per cent, we are well positioned for strong growth in both broadband and pay-TV. This allows Forthnet to make unique and attractive triple pay offers in the Greek market.”
Forthnet, publicly listed on the Athens Stock Exchange, is the largest alternative telephony, internet and video operator in the Greek market.
Forthnet has raised capital for the NetMed acquisition in part through a highly successful 3-for-1 rights issue, Pantelis Tzortzakis, chief executive of Forthnet, said.
“The rights issue attracted strong support, with more than 89 per cent of the shareholders responding positively. The overwhelming response to the issue has validated our future growth plans and strategy,” he noted.
‘Revenue synergies are expected from cross-selling and bundling of TV and broadband services. Furthermore, cost synergies are expected to eliminate duplications in cost bases and leverage economies of scale.’
“The Nova acquisition provides us access to the highly attractive Greek pay-TV market and has enhanced our competitive position in the underpenetrated Greek broadband market,” Tzortzakis added.
The management of both Forthnet and NetMed have an excellent track record, exemplified by their robust revenue growth, showing an ability to deliver shareholder value.
Forgendo, the largest single shareholder in Forthnet, agreed to fully underwrite the rights issue and to oversubscribe for shares up to a commitment of a total of Dh1.6 billion.
Sonny Portelli, chairman of GO, said: “We have further consolidated our position as the largest single shareholder in Forthnet through underwriting the rights issue. We are now in a position to continue to drive the company’s development strategy and move together on a path of continued growth.”
NetMed’s status as an attractive investment opportunity is boosted by the fact that it has over 330,000 subscribers in Greece, where it has nearly a 100 per cent pay-TV market share, and in Cyprus, where it has nearly 13,000 subscribers.
The company offers a premium content portfolio that includes exclusive sports, movies and thematic packages of channels.
EIT currently manages four telecom investments including Tunisie Telecom, the largest provider of telecommunication networks and services in Tunisia; GO, Malta’s only quadruple-play operator (offering mobile, data, fixed and TV services); and Interoute, a carrier’s carrier having the largest Next Generation Network (NGN) across all of Europe; Forthnet and NetMed in Greece.
EIT is currently the major shareholder in GO, Malta’s leading telecom services provider, which has been active in communications for more than 30 years. Its shares are traded on the Malta and London Stock Exchanges.-TradeArabia News Service
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