Telekom Austria’s EuroTeleSites Shares Trade at a Discount on First Day of Trading

The reference price for shares in the Telekom Austria radio tower business was set at 4.95 euros the day before.

EuroTeleSites shares were at a discount on Friday, their first day of trading on the Vienna Stock Exchange. The first price of the Telekom radio tower subsidiary’s securities was quoted at 4.31 euros. At 9:10 a.m. it was trading at 4.50 euros, around nine percent below the reference price of 4.95 euros set the day before.

Against the background of the IPO, Telekom Austria shares rose by 1.4 percent to 6.52 euros. Since the announcement of the Funkturm subsidiary’s IPO at the end of June, Telekom Austria’s share price has risen by 12 percent to 7.59 euros.

During the IPO of EuroTeleSites, Telekom Austria shareholders will receive an additional share certificate in the company for every four shares. The ownership structure of EuroTeleSites corresponds to that of Telekom: The Mexican telecommunications company America Movil holds 56.55 percent, the state holding company ÖBAG has 28.42 percent of the shares and 15.03 percent is in free float.

The spin-off should be worthwhile because the cell phone masts will increasingly be rented out to other cell phone operators in the future. In addition, through the spin-off, the A1 Group will immediately get rid of debts amounting to one billion euros, which will be transferred from A1 to the new infrastructure company EuroTeleSites.

The financing of EuroTeleSites is already in place, said Funkturm CEO Ivo Ivanovski to analysts at the Capital Markets Day at the beginning of September. 500 million euros come from a bond, plus a loan for 500 million euros and a credit line (RCF) for 75 million euros.

According to the company, the annual turnover of the newly listed company currently amounts to over 230 million euros. “We expect revenue growth of 4 to 6 percent per year for the next few years,” said EuroTeleSites CFO Lars Mosdorf at the Capital Markets Day. Two-thirds of the growth will be driven by the anchor tenant A1 and the 5G expansion, which currently accounts for around half of A1’s infrastructure investments. (APA)