Greek telecom group OTE, the majority shareholder of Telekom Romania, decided in April this year to bring EUR 800 million to increase the capital of the group’s mobile telephony company, Telekom Romania Mobile Communications (TRMC, formerly Cosmote Romania), local Ziarul Financiar reported.

In essence, by this move, OTE waived TRMC’s debt, an issue that prevented in the past the merger of OTE’s divisions in Romania but was accepted now, as OTE wants to speed up the sale of its Romanian subsidiaries. The operation was endorsed by shareholders on April 24 and will be carried out by issuing new shares.

Telekom Romania, the former Romtelecom, where the Romanian state holds a 45.99% stake, which is the other shareholder of TRMC with a 30% stake, did not participate in the capital increase operation. However, after the capital injection, the structure of the shareholders remained unchanged: OTE holds 70% and Telekom Romania holds 30% (there is also an insignificant package held by a third owner, Radiocom).

By this deal, Greek group OTE compensated (and took responsibility for, or waived) the losses incurred by the mobile operations in Romania, a move that settled the problem of the historical debt of TRMC to OTE group (valued at approximately EUR 600 million three years ago). This paves the way for the sale of operations on the local market.

OTE is part of German group Deutsche Telekom, which got involved directly in managing the operations in Romania after rebranding the local operations in 2014.

editor@romania-insider.com

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