NORWAY, Feb. 6, 2001 (PRIMEZONE) -- Telenor (Nasdaq:TELN) has informed British Telecommunications plc (BT) that the company will exercise its option to divest Telenor's 49.5 per cent stake in the Irish mobile company Esat Digifone to BT. The transaction, which is expected to be completed during March this year, will give Telenor a pre-tax profit of approx. NOK 10.1 billion.
The transaction entails a total cash consideration to Telenor of about NOK 10.8 billion, and is the result of an agreement that Telenor and BT entered into in January 2000. The divestment will yield an accounting profit for Telenor of approx. NOK 10.1 billion before tax, based on the present rate of exchange.
Telenor acquired a 40 per cent stake in Esat Digifone in 1996. This stake was subsequently increased to 49.5 per cent. In January last year, following BT's take over of the Esat Telecom group, Telenor entered into an options contract with BT which gave the company the right to sell its equity holdings to BT for a pre-determined price.
Commenting on the Esat transaction, Telenor President and CEO, Tormod Hermansen said: "This is probably one of the largest returns on a single investment ever realised by a Norwegian company. When the returns on the investment in VIAG Interkom earlier this year are included, Telenor has gained a pre-tax profit of over NOK 20 billion over the past two months on investments abroad."
Since 1996, Telenor has invested a total of NOK 958 million in Esat Digifone.
The transaction is expected to be completed during March this year and is subject to approval by the EU and Irish telecom authorities.