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Poland's Play Plots €3.5B IPO

Iain Morris
6/19/2017
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Polish mobile operator Play has announced plans for an initial public offering (IPO) that could value the company at more than €3.5 billion ($3.9 billion), according to analysts cited in mainstream press reports.

The fast-growing company, which is Poland's second-biggest mobile operator with about 14.3 million customers, says an IPO will give it more flexibility when it comes to its future financing and corporate strategy.

An IPO that valued Play at €3.5 billion ($3.9 billion) would be one of Europe's biggest in the telecom sector for several years and could attract investors excited by Play's rapid growth in the Polish telecom market.

Like Iliad in France, Play has chewed away at the business of its longer-established rivals, growing its market share from just 4.6% at the end of 2008 to about 27.6% currently.

Its revenues grew by 12.5% last year, to about 6.1 billion Polish zloty ($1.6 billion), while its adjusted earnings (before interest, tax, depreciation and amortization) were up 13.9%, to more than PLN2 billion ($530 million).

There may be some concern, however, that Play is now set for a much slower pace of growth following its sprint of the last few years.

Play itself acknowledges that Poland's mobile market is now quite evenly divided between the four main network operators -- the other three being Orange Polska , T-Mobile and Polkomtel SA .


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But it also reckons it can increase operating revenues at a "mid-single digit" rate in the medium term as well as further improve its adjusted EBITDA margin.

"Play benefits from the consistently strong performance of the Polish economy and the increasing sophistication of our customer base's use of data, so we believe we can offer investors an unrivalled combination of growth and returns in our sector," said Jorgen Bang-Jensen, the operator's CEO, in a company statement.

Play is ultimately controlled by Greece's Olympia Investment and Novator Partners of Iceland and is said to be looking to raise about €700 million ($781 million) during the IPO, some of which it would use to reduce debts, according to press reports.

In its IPO prospectus it also said it would pay a dividend of PLN650 million ($172 million) for the current fiscal year (which ends in December), and that its aim was use between 65% and 75% of free cash flow for dividend payments from 2018 onwards.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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