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4iG capital increase for Antenna Hungária

February 23, 2022

By Colin Mann

Hungarian IT and ICT company 4iG is to create what it says will be the second largest player in the Hungarian telecoms and media services market with a capital increase of HUF 402 billion (€1.13bn) into Hungarian national transmission company Antenna Hungária.

This follows the agreement by Andrea Mager, Minister without Portfolio for National Assets Management on behalf of the Hungarian State and Gellért Jászai, Chairman-CEO of 4iG Plc on closing the implementation of a contribution and share subscription related to the acquisition of Antenna Hungária.

As a first step, 4iG will acquire 71.6  per cent of the shares in Antenna Hungária Zrt. through a capital increase by means of a contribution of its shareholdings in DIGI Group, Telenor Crna Gora d.o.o. and Invitech Ltd. The transaction will create one of the leading telecommunications groups in Hungary and the Central and Eastern European region.

As previously announced, the Budapest Stock Exchange listed 4iG Plc will acquire a majority stake in Antenna Hungária Zrt. An agreement on the closing conditions for the implementation of the transaction was signed between the Minister without Portfolio for National Assets Management, who is responsible for the ownership of the state-owned telecommunications company, and 4iG Plc.

The national telecoms group formed by the merger of the telecoms interests of Antenna Hungária and 4iG will be the second largest player in the Hungarian telecoms and media services market, with a dominant infrastructure and service portfolio in the business (B2B) and retail (B2C) service segments in the Central and Eastern European region.

In accordance with the agreement, 4iG Plc will increase the capital of Antenna Hungária by firstly transferring its 100 per cent stake in DIGI Távközlési és Szolgáltató Kft. and its subsidiaries (Invitel Zrt., DIGI Infrastruktúra Zrt., i-TV Zrt.), Invitech ICT Kft. and the 100 per cent stake in the Montenegrin mobile operator Telenor Montenegro to the state-owned company.

The value of the current capital increase reaches HUF 402 billion, and the share transfer and subscription agreement provides 4iG with an additional opportunity to increase its stake in Antenna Hungária Zrt. to a maximum of 80 per cent by further contributing companies in line with its telecom holding profile. As a result of the current transaction, the Hungarian state will hold 28.4 per cent of the group, while 4iG Plc will acquire a majority controlling stake of 71.6 per cent.

“Under this agreement, a strategic telecommunications and telecommunications infrastructure services company will be created, combining public and private capital, which will represent domestic interests in the industry providing competitive market services,” stated Mager.

“The strategic partnership between the Hungarian state and 4iG will create a new player in the telecommunications market that – thanks to its size, infrastructure and wide range of business and retail services – will be able to compete successfully with multinational corporations,” declared Jászai. “We are creating a teleco company dominant not only in Hungary but in the region as well. We are facing an exciting period as we are integrating the telecoms portfolio of the companies, and meanwhile we are completing our ongoing acquisitions and launching new brands and services in the retail and business services segments, in line with our strategy.”

As a pre-condition for the transaction, the parties relied on the appraisal of PwC Hungary to determine the contribution value of Antenna Hungária and that of the companies involved in the capital increase. The MEIP (Market Economy Investor Principle) test related to the transaction was conducted by the internationally based legal advisory firm DLA Pipers. The transaction I  s expected to close by mid-March, following registration with the Companies Registry Court and the issue of new shares.

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