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La join venture fra Deutsche Telekom e France Telecom relativa alle rispettive unità operanti nel mobile in UK viene esaminata da Fitch in questo breve report nella sua struttura.
L'apporto reso da DT è di minor valore rispetto a quello conferito da FT, il che dà luogo ad alcune compensazioni a vantaggio della seconda società, poste in essere in un'ottica di medio periodo, così da non incidere sul cash di DT.
La JV dovrebbe portare a sinergie rilevanti sul piano dei costi operativi, sebbene sia da valutare nella sua efficacia e nei costi la politica di branding che sarà condotta dalla nuova società, che diviene market leader nel mobile in UK.
Nel breve termine il suo impatto sui conti dei due colossi resta contenuto ed inidoneo ad incidere sui rispettivi rating... nel più lungo termine, essa dovrebbe recare moderati benefici in termini di crescita del cash flow per entrambe le società.
Fitch: Deutsche Telekom & France Telecom UK JV Ratings Neutral
08 Sep 2009 11:14 AM (EDT)Fitch Ratings-London-08 September 2009: Fitch Ratings says today that Deutsche Telekom's (DT, rated 'BBB+'/Stable) and France Telecom SA's (FT, rated 'A-'/Stable) decision to combine their respective UK mobile telephone assets into a joint-venture is likely to be neutral to both companies' credit ratings.
The companies' decision to merge their UK operations (T-Mobile and Orange) will create the leading mobile operator with 28.4 million subscribers and a pro-forma market share of 37%. Fitch notes that strategically the new JV seeks to address operating challenges at both companies.
Although the JV's branding remains to be clarified, as the new market leader, it is likely to become more competitive. The agency notes that the JV could bring significant synergies (GBP3.5bn) that have already been identified by the companies and which would likely improve the financial results of the combined entity. Fitch understands that the JV will be free cash flow (FCF) generative from its inception.
For DT, the transaction would amount to fixing its mobile operating deficiencies in the UK at a price of GBP1.25bn (EUR1.43bn). As the number four UK operator, with only a 15% share in an overly competitive market, DT has long sought to sort out competitive issues in its UK mobile business and to improve the segment's poor financial results. Fitch is of the opinion that both these goals are likely to be achieved by the new partnership.
The agency estimates that the transaction will increase DT's leverage ratio measured as net debt/EBITDA by around 0.1x, by end-2009, which is not critical and would remain consistent with DT's current ratings. In the long-term, the deal is likely to provide DT with stronger UK cash flows.
Both operators agree that the difference in the value of their contributions to the JV is GBP1.25bn, subject to further due diligence. Initially this will be reflected as the JV's debt to FT. DT will contribute GBP625m of cash to the JV, and the JV will later pass it on to FT.
The remaining GBP625m debt to FT will be repaid from the JV's cash flows, reducing the cash contribution to DT in the medium-term, so that the operator would only receive the full cash flow benefits of the JV in the long-run. The JV will also be servicing the GBP625m shareholder loan from DT.
Fitch views the transaction as positive for FT. The deconsolidation of its lower margin UK asset would slightly improve the group's overall profitability.
In addition, FT confirmed its organic cash flow guidance of EUR8bn for 2009, while on a pro-forma basis (FY08), FT's net leverage would increase slightly to 1.91x from 1.85x, including the expected repayment of GBP625m (approximately EUR715m) by the JV to FT. Going forward, Fitch believes that FT will benefit from improved cash flows generated by the UK JV.
L'apporto reso da DT è di minor valore rispetto a quello conferito da FT, il che dà luogo ad alcune compensazioni a vantaggio della seconda società, poste in essere in un'ottica di medio periodo, così da non incidere sul cash di DT.
La JV dovrebbe portare a sinergie rilevanti sul piano dei costi operativi, sebbene sia da valutare nella sua efficacia e nei costi la politica di branding che sarà condotta dalla nuova società, che diviene market leader nel mobile in UK.
Nel breve termine il suo impatto sui conti dei due colossi resta contenuto ed inidoneo ad incidere sui rispettivi rating... nel più lungo termine, essa dovrebbe recare moderati benefici in termini di crescita del cash flow per entrambe le società.
Fitch: Deutsche Telekom & France Telecom UK JV Ratings Neutral
08 Sep 2009 11:14 AM (EDT)Fitch Ratings-London-08 September 2009: Fitch Ratings says today that Deutsche Telekom's (DT, rated 'BBB+'/Stable) and France Telecom SA's (FT, rated 'A-'/Stable) decision to combine their respective UK mobile telephone assets into a joint-venture is likely to be neutral to both companies' credit ratings.
The companies' decision to merge their UK operations (T-Mobile and Orange) will create the leading mobile operator with 28.4 million subscribers and a pro-forma market share of 37%. Fitch notes that strategically the new JV seeks to address operating challenges at both companies.
Although the JV's branding remains to be clarified, as the new market leader, it is likely to become more competitive. The agency notes that the JV could bring significant synergies (GBP3.5bn) that have already been identified by the companies and which would likely improve the financial results of the combined entity. Fitch understands that the JV will be free cash flow (FCF) generative from its inception.
For DT, the transaction would amount to fixing its mobile operating deficiencies in the UK at a price of GBP1.25bn (EUR1.43bn). As the number four UK operator, with only a 15% share in an overly competitive market, DT has long sought to sort out competitive issues in its UK mobile business and to improve the segment's poor financial results. Fitch is of the opinion that both these goals are likely to be achieved by the new partnership.
The agency estimates that the transaction will increase DT's leverage ratio measured as net debt/EBITDA by around 0.1x, by end-2009, which is not critical and would remain consistent with DT's current ratings. In the long-term, the deal is likely to provide DT with stronger UK cash flows.
Both operators agree that the difference in the value of their contributions to the JV is GBP1.25bn, subject to further due diligence. Initially this will be reflected as the JV's debt to FT. DT will contribute GBP625m of cash to the JV, and the JV will later pass it on to FT.
The remaining GBP625m debt to FT will be repaid from the JV's cash flows, reducing the cash contribution to DT in the medium-term, so that the operator would only receive the full cash flow benefits of the JV in the long-run. The JV will also be servicing the GBP625m shareholder loan from DT.
Fitch views the transaction as positive for FT. The deconsolidation of its lower margin UK asset would slightly improve the group's overall profitability.
In addition, FT confirmed its organic cash flow guidance of EUR8bn for 2009, while on a pro-forma basis (FY08), FT's net leverage would increase slightly to 1.91x from 1.85x, including the expected repayment of GBP625m (approximately EUR715m) by the JV to FT. Going forward, Fitch believes that FT will benefit from improved cash flows generated by the UK JV.
