Telia and Turkcell have agreed to sell their Georgian mobile operator Geocell to the local fixed operator Silknet for USD 153 million.
Silknet is Georgia’s largest fixed network operator and has a 41 percent share of the internet market and 48 percent of the fixed phone market. The company is owned by the three local investors George Ramishvili, Alex Topuria and David Borger and plans to finance the acquisition through a combination of equity and debt (a syndicated loan arranged by TBC Bank with other Georgian and regional banks).
Silknet said Georgian consumers can expect significant benefits from the combination, thanks to its plans to offer convergent broadband, pay TV, mobile and fixed telephony offerings, including enhanced mobile access to Silknet’s exclusive content such as global sport competitions. Silknet will develop the new offers with support from the Orange Alliance, which helps independent operators in countries where Orange is not present.
Subject to approval of the local regulatory authorities in Georgia, the acquisition is expected to be completed in the second quarter 2018.
Geocell is owned by Turkish company Gurtel Telekomunikasyon Yatirim ve Dis Ticaret, a subsidiary of Fintur, the joint holding company of Telia and Turkcell. Fintur owns 99.9 percent of Gurtel, and the other four minority shareholders will also sell their stakes.The transaction price for Geocell is based on an enterprise value of USD 153 million for 100 percent of the company. The price corresponds to a multiple of 4.5x EBITDA for 2017.
The deal is part of Telia's efforts to exit its Eurasian holdings in order to focus on the Nordic markets. The transaction is expected to result in a capital loss of SEK 0.1 billion for Telia, in addition to the impairment of SEK 0.6 billion recognized in December 2017, and net proceeds of SEK 0.7 billion after distribution of Turkcell’s share of the proceeds.
