Mobile phone firm sells Dutch subsidiary
UK mobile phone firm mmO2 today announced the sale of its Dutch subsidiary O2 Netherlands to private equity firm Greenfield Capital Partners for €25m.
As it revealed the decision to withdraw from one of its four operating countries, the former BT Cellnet business said proceeds from the sale would be pumped back into the business.
Slough-based mmO2 revealed in November it was considering a number of options for its business in the Netherlands where five rival operators make for a crowded and highly competitive market.
The company, which is due to report annual results on May 21, said its Dutch subsidiary had a turnover of £200m (€293m) in the year to March 31, with operating losses of £119m (€174m) before one-off costs.
O2 Netherlands, previously known as Telfort Mobiel, was founded in September 1996 as a 50:50 joint venture between BT and Nederlandse Spoorwegen, the Dutch railway company.
The subsidiary, which employs 750 people and has around 1.25 million customers, became wholly-owned in November 2001 following the formation of mmO2 when it demerged from BT.
Having originally provided fixed line phone services, it was awarded a mobile licence in February 1998. BT purchased the remaining 50% in July 2000 for £1.2bn (€1.76).
A £1.4bn (€1.9bn) provision for the losses incurred by the unit will be treated as an exceptional item in its accounts for the year to March 31.
MmO2 chief executive Peter Erskine said: “We believe that this deal is in the best interests of mmO2 shareholders and also represents a good opportunity for the Dutch business, its employees, customers and suppliers going forward.
“The Greenfield offer enabled us to sell at a realistic valuation given market conditions in the Netherlands.”
Greenfield is an independent private equity and corporate finance group based in Naarden, Netherlands, with existing interest in the fixed telecoms sector. In August 2002, Greenfield acquired Enertel, the Dutch business of Energis.
MmO2 said it would now focus on driving growth from its existing operations and improving its operational performance in its core markets.
In February, mmO2 said it had taken overall customer numbers to 19.1 million in its four operating countries – which included Ireland and the Netherlands.
Much of its growth has been driven by text messaging and other data services and which now account for 17.7% of revenues.
