BUDAPEST--Hungary's leading telecommunications company by market
share Magyar Telekom Nyrt. (MTELEKOM.BU) said Wednesday that it has
signed an agreement with MET Holding AG, a leading integrated
retail energy services trader in the central European region, to
establish a joint venture that will provide energy services to
business customers.
MAIN FACTS:
- The cooperation is based on an agreement signed in July 2013
between Magyar Telekom and Hungarian oil and gas company MOL Nyrt.
(MOL.BU), which has a significant ownership stake in MET Group.
- The primary aim of the joint venture is to improve and
optimize the energy operations serving the business customers of
both Magyar Telekom and MET Group.
- Due to the establishment of the joint venture, natural gas and
electricity services currently provided by Magyar Telekom to
business customers will be ceased in the medium term as these
services will be provided by the joint venture.
- The change in the business energy service operation will have
no impact on the residential energy service offered by Magyar
Telekom.
- The joint venture will be equally owned by both parties, with
balanced management rights.
- Once the joint venture has commenced operation, the business
energy service operations will no longer be consolidated into
Magyar Telekom's results but 50% of the joint venture's results
will appear as a below-earnings before interest, tax, depreciation
and amortization item.
- As a consequence, total revenues for Magyar Telekom are now
anticipated to be proportionally lower than previously guided, down
by around 35 billion forints to 40 billion forints in 2017,
implying roughly stable revenues compared to 2014 of HUF626.4
billion.
- Completion of the transaction, which requires approval by the
relevant authorities, is anticipated in the second half of
2015.
Write to Margit Feher at margit.feher@wsj.com