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The funds raised will be used to take advantage of merger and acquisition opportunities, as well as expanding the company’s infrastructure rollout
Today, Telekom Srbija has announced that it will issue a new €500 million Eurobond, likely in Luxembourg or Frankfurt.
According to company CEO, Vladimir Lucic, the bond will be used primarily to fund future acquisitions within the Balkans, with a smaller portion of the funds dedicated to expanding the company’s network infrastructure rollout.
“This will open possibility for a quick reaction in case of any new acquisition opportunities in the region,” Lucic told Reuters.
Telekom Srbija’s expansion strategy has focussed largely on acquisitions throughout the Balkan region for many years now and has served it well so far. The company has spent almost €200 million of cable company acquisitions in the past few years, the most recent of which being the acquisition of Posta Net, the cable TV and internet business of government-owned, Posta Srbija, late last year.
Discussing the company’s most recent progress report, Lucic noted that the company had acquired 150,000 new subscribers across TV and internet services in the last year, with net profit expected to exceed $157 million in 2022.
The funds will come at a time when Telekom Srbija has been coming under scrutiny for its unprecedented expenditure on broadcasting rights.
Late last year, the operator paid around €600 million for exclusive rights to broadcast the Premier League during its six-season contract from 2022/23 to2027/28, following a fierce bidding war with rival United Media. This price tag amounted to a more than 700% increase on the previous Premiere League contract held by Serbia Broadband.
This was not the first time that the company had demonstrated its willingness to in at all costs and pay large sums for sports broadcasting opportunities. A previous battle for the rights over Italian football league Serie A saw the company pay €25 million per season for the 2021/22–2023/24 seasons, up from €5 million per season previously.
Critics suggest that Telekom Srbija, which is majority owned by the Serbian government, is misusing public funds in agreeing to pay such extortionate prices.
“Everyone involved with sports broadcasting rights for this region is astounded and disbelieving. Those prices are untenable for any company operating on market principles because that is unprofitable not just for the Balkan countries but for countries much richer than us with greater populations and higher subscription prices,” said Nemanja Simeunovic, CEO of the Sport Klub cable TV station.
Srbija Telekom itself, however, disagrees, with Lucic saying that the investment in the Premier League is a profitable one and will increase company revenue.
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