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Thursday, October 4, 2007

Telekom Austria's 'BBB+' unchanged by planned Mobile Digital buy - S&P

Standard & Poor's (NYSE:MHP) Ratings Services said its 'BBB+' rating and stable outlook on telecom operator Telekom Austria AG (OOTC:TKAGY) remains unchanged following the company's plans to buy Belarussian mobile operator Mobile Digital Communication for up to 1.05 bln eur.

The rating agency expects TA will return to the boundaries of its financial policy within the next 12-18 months through its strong domestic free cash flow generation.

It also expects that TA will restore its financial flexibility in the very near term.

TA will pay an initial 730 mln eur for a 70 pct stake in MDC and another 320 mln eur for the remainder of 30 pct stake in the fourth quarter of 2010. The initial amount will be financed using existing credit facilities and the rest through a call and put option agreement.

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