Mid Europa takes Invitel private

Central and Eastern European private equity firm Mid Europa Partners is to take a controlling stake in Hungarian telecommunications and broadband operator Invitel.

The deal will involve three separate transactions and is conditional on the refinancing of Invitel’s debt and on Mid Europa purchasing some of Invitel’s bonds.

Mid Europa will pay €7.3m for over 10 million Invitel shares (64% stake) from Danish operator TDC. This will allow Invitel to de-leverage the company and its subsidiaries.

The CEE firm will also purchase all of TDC’s rights and obligations under a €34.1m subordinated PIK loan, which will be increased up to €91.4m. And finally, Mid Europa will launch a tender offer for the outstanding €125m floating rate senior PIK notes due 2013 which are currently held by Invitel.

Senior partner at Mid Europa, Craig Butcher said: “Our contemplated investment in the Invitel Group, through the series of transactions, will strengthen Invitel’s balance sheet and better enable it to realize the growth potential of several of its core markets.”

Invitel, formerly known as Hungarian Telephone and Cable Corporation, HTCC, is one of the largest telecommunications and broadband internet service providers in Hungary. It also delivers wholesale telecommunications in Central and Eastern Europe as well as voice and data services in Hungary.