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PPF Group up to its old restructuring tricks again

In an attempt to create more value from its telco presence in Central and Eastern Europe (CEE), investment firm PPF Group is splitting the retail and infrastructure operations of former Telenor assets – in which it has a majority stake following a €2.8 billion (US$3.1 billion) deal in 2018 – into what looks like two legally separated divisions.

Under the arrangement, the infrastructure activities of Telenor-branded mobile operators in Bulgaria, Hungary and Serbia are to be hived off into a newly established CETIN Group.

Newly founded CETIN Bulgaria, CETIN Hungary and CETIN Serbia, together with the already existing CETIN infrastructure activities that PPF set up earlier in the Czech Republic, will – "subject to completion of internal restructuring" – form CETIN Group.

The idea is that all Telenor-branded organizations will rely on the services of their local CETIN providers, and that CETIN Group will become the "telecommunication infrastructure backbone of PPF Telecom Group."

"Separating infrastructure from retail [including B2B] will enable the two separated entities in each country to wholly focus on two different market segments and meet in the most efficient way the increasing demands of the CEE telecommunications market," said PPF in a statement.

The aim of CETIN Group is to target other wholesale customers in the region and internationally, including O2 Czech Republic, rather than just focusing on Telenor-branded operations in CEE.

PPF talked glowingly about CETIN Group's "extensive, 24/7 supervised networks," which will apparently provide "superior voice, data, TV, video, IT, and cybersecurity services."

Each of the new regional CETIN organizations, added PPF, will "begin to apply key learnings from the 2015 separation of O2 and CETIN in the Czech Republic."

Five years ago, PPF separated the infrastructure activities of O2 Czech Republic (dubbed CETIN) from retail operations. The two divisions are legally separate from one another. PPF acquired a majority stake in O2 Czech Republic in 2014.

There's no sense, at least from official statements, that the investment firm is looking to cash in anytime soon by, say, flogging its stake in CETIN Group.

"PPF Telecom Group expects this move to strengthen both the retail and infrastructure businesses and lead to greater opportunities across CEE, with Telenor CEE stakeholders and consumers only benefiting from the separation, just as a similar separation of O2 and CETIN in the Czech Republic did five years ago," maintained PPF.

— Ken Wieland, contributing editor, special to Light Reading

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