The Romanian Post Privatisation Fund (FRPP) and businessman Mihai Batraneanu are in advanced talks over the sale of Internet provider PCNET. RCS&RDS, one of the two leaders of the Romanian cable TV market, has emerged as the main contender in the race for PCNET, market sources say.
Procedures for the sale of PCNET started almost one year ago, with Astral Telecom, the other big player on the cable TV segment, being originally interested in buying the company. RomTelecom was also interested in purchasing the Internet provider, but had to delay the acquisition plans because of the restructuring process initiated by Greek group OTE with regard to the national telecom operator.
Eventually, the best bid came from the RCS&RDS concern. During the negotiations, PCNET was assessed at some ten million dollars, according to the quoted sources.
Contacted by Ziarul Financiar, the representatives of PCNET, FRPP, and RCS&RDS would not volunteer any comments on the PCNET sale negotiations. According to the quoted sources, a final understanding on the transaction's terms and conditions is to be signed in the coming weeks. The transaction will then have to be endorsed by the Competition Council.
The FRPP currently holds a 75% stake in PCNET, Mihai Batraneanu (the company's founder) holds about 20%, with the rest belonging to smaller shareholders.
PCNET, established in 1993, will help RCS&RDS gain ground in the field of Internet services and voice communications. The company has some 80,000 clients for its Internet services, most of them subscribing to dial-up services and some 2,000 having chosen the offer of a broadband (fiber optic) connection. As for voice services (prepaid cards), PCNET has a market share estimated at 40 percent. Last year the company posted turnover worth 6.7 million dollars and EBITDA amounting to 600,000 dollars. According to estimates for this year, revenues are expected to reach nine million dollars, with EBITDA to surge to 1.5 million dollars.
FRPP became the main shareholder in PCNET in 1999, following capital increases worth four million dollars. The sale was prompted by the investment having matured.
FRPP is one of the main investment funds in Romania, with investments standing at around 50 million dollars in 12 Romanian companies since 1996.
The fund has invested in companies such as Sicomed Bucharest (pharmaceuticals), Arctic Gaesti (household devices), IRIDE Business Park (business centre), Continental (hotel chain), PCNET (telecoms) and Vitalgaz (natural gas distribution).
The fund's last exit (sale of shares) involved the sale of its stake in IRIDE Business Park some two months ago. The total value of the IRIDE sale stood at 40 million euros.
Just as in the case of PCNET, the fund's general strategy aims to identify companies with strong growth potential, to give them financial support through capital increases or loans and, eventually, sell them to a strategic investor.
In fact, RCS&RDS is also held by investment funds, which will want, at some point, to sell the company. The same is true of Astral Telecom.
laurentiu.ispir@zf.ro ; dan.dragomir@zf.ro
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