PRESS RELEASE
Scope has upgraded 4iG
The acquisition of Vodafone could significantly improve the company’s market position
- Scope Ratings has upgraded the issuer rating of 4iG Plc to BB-/stable from B+ (positive outlook). At the same time, the rating agency upgraded the debt rating of 4iG's already issued bonds to BB-/stable from B+ (positive outlook).
- The upgrade reflects an improved competitive positioning, business profile, profitability and improving credit metrics, with the acquisition of Vodafone Hungary, which has a significant share of the Hungarian mobile market.
- The upgrade is also recognition of 4iG’s successful expansion strategy, with the Vodafone Hungary transaction making the Group a regional champion.
- The company’s debt/earnings ratio could improve in the coming years, which could lead to a further upgrade of 4iG.
The issuer and debt ratings of 4iG
Plc (4iG) have been upgraded to BB- by Scope Ratings, which may be affirmed
following the closing of the Vodafone acquisition, as the capital markets
company has announced on the Budapest Stock Exchange. The upgrade reflects an
improved competitive positioning, business profile, profitability, and
improving credit metrics following the acquisition of Vodafone Hungary, which
has a significant share of the Hungarian mobile market. Last November, the
rating agency revised the B+/stable rating to positive outlook and indicated
that it may upgrade 4iG’s issuer and bond debt ratings. Scope Ratings expects
the Vodafone acquisition to close in the coming weeks.
"The upgrade also represents
recognition of the successful expansion strategy of the 4iG Group launched in
2021," stressed
Péter Fekete, Group CEO of 4iG Plc in connection with the upgrade. "The
acquisitions made over the past one and a half years have improved the Group’s
financial indicators, the acquired companies complement each other well, and
the integration process will allow the Group to exploit a wide range of
synergies. The company has now become the number one telecoms operator in
Albania, and the Vodafone Hungary transaction will make 4iG not only a national
champion, but also a regional champion," added Péter Fekete.
Scope highlighted that the
acquisition of Vodafone will enable the 4iG Group to become Hungary’s second
largest mobile operator (3.2 million subscribers), and a market leader in the
fixed broadband segment (1.5 million subscribers). The transaction will also enable
the Group to become a complex convergent mobile-wired operator.
According to Scope’s scenario, 4iG
Plc’s debt/EBITDA ratio could decrease to 4.5 by 2024, with the evolution of
the debt stock contributing to a stable outlook thereafter. The rating agency’s
analysis foresees further upgrades on the back of the stable integration of
recently acquired companies, the consolidation of group-wide financial
operations, and the moderation of M&A activity, thus the debt/EBITDA ratio
could fall substantially below 4. A favourable outcome of the Vodafone
transaction could increase 4iG Group’s EBITDA margin to around 30-35%, and the Group’s
expansion, together with more stable and diversified revenues and the gradual
realisation of synergies, could further improve its operating profitability and
business risk profile. Scope’s analysis concluded that 4iG’s ability to repay
debt is stable over the long term.
Budapest, 6thJanuary 2022
Background information:
4iG Plc.
4iG Plc, a Hungarian
majority-owned company based in Budapest, Hungary is the leading
telecommunications and IT group in Hungary and the Western Balkan region and
one of the leading companies in the knowledge-based, digital economy. The
Budapest Stock Exchange listed capital market company’s fresh and innovative
approach and its position as Hungary’s leading IT systems integrator make the
group a leading residential and business service provider in the region’s
digital transformation. 4iG’s dynamic expansion strategy has made it a key
player in the telecommunications markets in Hungary and the Western Balkans.
The Group is continuously expanding its services, expertise, and portfolio to
meet the changes and needs of the telecommunications and IT markets. The 4iG
Group currently employs nearly 6,000 people. www.4ig.hu
Scope
Scope
Group, founded in Berlin in 2002, provides independent rating, research, and
risk analysis of bonds. Scope Ratings is a leading European credit rating
agency providing credit risk analysis, with a distinctly European approach to
credit research and assessment. Scope Ratings is registered under the EU Rating
Regulation and operates in the European Union with ECAI status. In their
activities, credit rating agencies assess the creditworthiness and willingness
to repay of the rated entity. They aggregate information and produce indicators
for borrowers, lenders, and capital market participants.
More
information:
Péter Elkán
Group Head of
Corporate Affairs and Communication
sajto
(@) 4ig.hu