Telecoms company ETel, which operates in Central and Eastern Europe, is considering the purchase of the retail businesses of the pan-European telecoms operator, GTS.
Mr Sean Melly, founder and chief executive of Dublin-based ETel Group, told The Irish Times yesterday that GTS's corporate businesses would be a "perfect fit" for ETel and the matter was under consideration.
"We are not definitely going to make an offer but we are looking seriously at GTS's central and Eastern European businesses," he said. Earlier this month GTS said it was putting its central Europe division up for sale as part of a group restructuring. The operations are listed as having an annual revenue of €60 million (£47.2 million) with annual earnings before interest, tax, depreciation and amortisation of €6 million.
Mr Melly said these operations could be worth $200 million (€234 million) although ETel may try to buy smaller chunks of GTS's operations in ETel's target markets of the Czech Republic, Poland, Hungary and Slovakia.
GTS has appointed Credit Suisse First Boston to handle the sale of GTS Central Europe which has operations in all ETel's target market and a smaller operation in Romania. A sale of the division is not expected to be completed until next year.
Mr Melly was speaking following the completion of ETel's fund raising round worth $50 million.
The investment, made for 45 per cent of ETel's equity, was led by Dresdner Kleinwort Benson Private equity, Argus Capital partners, Greenhill Capital partners and Intel Capital.
Mr Melly said the group would also look to raise an additional $100 million shortly to finance an infrastructure building programme forecast to cost $130 million.
ETel plans to build state-of-the-art fibre optic metropolitan area networks in Prague, Budapest and Warsaw. The firm will focus on selling data and voice to the corporate sector.
Mr Melly said the firm may also announce a strategic partnership shortly and would aim to negotiate a debt facility worth $30-$50 million with a bank.
ETel is Mr Melly's second play in the telecoms sector. He was founder and chief executive of TCL Telecom in the Republic which was bought by WorldCom Ireland in 1997 for a price estimated at £17 million.
He founded ETel in July 1999 in Dublin and has acquired telecommunications licences in Poland, Czech Republic, Hungary and Slovakia.
