Go plc and its major shareholder Emirates International Telecoms have increased their stake in Greek telecoms group Forthnet to 35 per cent, by acquiring just under 1.5 million shares for €2.61 million since June 10.
The investment was made through Forgendo Ltd, the investments vehicle jointly owned by Go plc and Emirates International Telecoms, on the Greek Stock Exchange on three separate occasions.
Forgendo acquired 591,182 shares for €1.1 million on June 10, 300,000 shares for €0.6 million on June 15, and 500,000 shares for €0.9 million last Friday. Go plc made company announcements on the Malta Stock Exchange on June 15 and June 18 over the first two acquisitions. Until noon yesterday, details of the third had not been announced locally.
Forthnet has, in the meantime, named Deepak Padmanabhan, as its chairman. Mr Padmanabhan sits on Go plc's board and is also a director on the board of Interoute, the European network provider. Go chairman Sonny Portelli and board director Michael Warrington have retained their posts as non-executive directors on Forthnet's board.
Forthnet describes itself as "one of the most dynamically developing Greek companies in the telecommunications and internet sector". It was established in 1995 by the Foundation for Technology and Research and Minoan Lines SA, and listed on the Athens Stock Exchange in 2000.
It was the first company to introduce internet services in Greece and has built a considerable portfolio of web services. It was also the first company to offer customers an alternative telecommunications package. In 2003, it acquired Internet Hellas as a business unit to specialise in data centre services.
Sources told The Times Business that there were several factors which made Forthnet particularly attractive to institutional investors. The company practically enjoys a monopoly in the Greek TV market and is only now starting to face some competition.
Greece has very low internet penetration, one of the lowest in the EU, and market potential in considerable. The government and the EU are in the process of offering attractive incentives to encourage domestic internet use.
Go's share of Forthnet's results impacted its financial statements for 2008: Go's recognition of Forgendo's results led to a charge of €15.6 million. Forthnet registered a loss in 2008 but sources say it has started to see operating profits this year.
Shareholders present at Go's annual general meeting last May were told: "Go's investment in Forthnet is seen as a means for Go and Emirates International Telecoms to secure new future revenue streams and growth opportunities, as well as added synergies with our Greek counterparts on various aspects of the communications business".
Go plc has around 8,000 shareholders.
This is Go plc's second major investment move this year. In late April, Go plc acquired a 60 per cent stake in three companies of the Malta-based Bell Net Group for €9.5 million.