GO plc, Malta’s leading quad play telecommunications company, is to acquire a majority shareholding in the Cypriot ‘triple play’ telecommunications company Cablenet Communications Systems Limited, in which it previously held a minority stake, the company said in a statement this morning.
In September 2014, in line with its strategy to pursue growth opportunities wherever it was logical to do so, GO had acquired 25% of the issued share capital of Cablenet in Cyprus. GO had also extended Cablenet a loan of €12,000,000 which was convertible into equity and, moreover, obtained an option to acquire majority control should it wish to do so.
GO’s Board have now agreed to proceed with converting the loan to equity. As a result of this, GO’s stake will increase from 25% to 45% of the issued share capital of Cablenet. GO is also exercising the option, included in the original Share Purchase Agreement, to acquire a further 6% of the issued share capital, bringing its total stake to 51%, and thereby acquiring majority control.
Cablenet is a privately owned business which began operations in 2003 as a cable TV provider in Cyprus. Since then the company has consistently expanded its network and its operations. Today, Cablenet is the leading privately owned broadband provider and offers packages which include broadband internet access, fixed telephony and digital HD TV to an increasing number of subscribers.
Mr Yiannos Michaelides, CEO at GO, said: “Apart from bringing us access to a larger market, and new income streams, our increased stake in Cablenet will enable us to leverage clear synergies between GO and Cablenet. Certainly, we will be able to share winning strategies and best practices in a number of areas and we see potential for further growth in a market that, although with its own characteristics, has many similarities to Malta.’’
Commented Mr Deepak Padmanabhan, GO’s Chairman, "GO firmly believes in the Maltese market, as evidenced by our Group’s recent acquisition of a controlling interest in an IT solutions entity. Committed as it is to Malta, GO also has a broader, regional vision and Cyprus fits in well with this. Since our acquisition of a minority stake in Cablenet in 2014, this company continues to perform strongly, delivering steady, double-digit growth in both revenue and EBITDA over recent years. We are therefore encouraged by the significant potential which this asset continues to offer us. The fact that GO is a position to embark on such strategic investments, at this point in its history, makes amply clear GO is a well-capitalised and dynamic entity with a clear forward-looking vision that encompasses not only its core domestic market but further afield. I believe this is good news for all stakeholders ’’