Wind and Vodafone are teaming up in an effort to take over Forthnet, 44 per cent of which is owned by Go and EIT through a company called Forgendo.
Wind Hellas and Vodafone have been vying for a majority stake for some time but they have now decided they stand a better chance of success if they join forces.
Wind Hellas, which holds a 33 per cent stake in Forthnet, agreed to transfer 13.25 per cent of its shares to Vodafone Greece, which has a call option open until June 2015 to acquire 14.58 million Forthnet shares.
No price has been announced for the transaction.
This would raise Vodafone’s stake in Forthnet from 6.5 to 19.75 per cent, putting it on par with Wind Hellas’ reduced shareholding. Their combined stake of just under 40 per cent would enable them to launch a bid to persuade Forgendo to sell its own shareholding.
The bid comes at one of the lowest points in Forthnet’s history. In the interim reports for the period ending March 31, 2014, the directors admitted that the group was unable to complete refinancing of its entire contractual obligations with respect to its bank debt, and that there was “a material uncertainty that may cast significant doubt on the company’s and the group’s ability to continue as a going concern”.
Forgendo has already lost a considerable amount from its investment in Forthnet, the main triple-play operator in Greece, and will clearly be holding out to get the best price possible – if it does decide to sell. Although the losses have been written off in Go’s balance sheet, any income from the sale would clearly be welcomed by the many minority shareholders who never understood the Forthnet strategy in the first place.
However, Forgendo may not have much choice about selling if Wind and Vodafone persuade the other minority shareholders in Forthnet to join their side, which would give them control of the company.
Forthnet failed to pay €61.5 million due in respect of its respective bond loans by the end of the first quarter, part of a total outstanding balance amounting to €323.8 million and €99.9 million for the group and company respectively. This means the group’s and the company’s current liabilities exceed their current assets by approximately €382.5 million and €52.3 million, respectively,
The Athens Stock Exchange announced that Forthnet shares were put in the ‘under surveillance’ segment, due to its weak financial situation.
Forthnet recently decided to divert €5 million of the €29 million share capital increase to repay company suppliers. The amendments will be submitted for approval in the upcoming Ordinary General Assembly of shareholders that will convene on June 24.