TDC merges with NTC
The Board of Directors of TDC A/S (TDC) has today signed a merger plan with
Nordic Telephone Company ApS (NTC). The merger will be implemented as soon as
possible, with TDC as the surviving company. The merger will have no tax
implications for the companies involved. The merger will be effective from 1
January 2009 for accounting purposes. The purpose of the merger is to simplify
the group structure and to optimize TDC's capital structure. The merger is
expected to be adopted by the Board of Directors of TDC before year-end.
NTC is a wholly-owned subsidiary of Nordic Telephone Company Holding ApS. In
connection with the merger, Nordic Telephone Company Holding ApS will acquire
the shares held by NTC in TDC prior to the merger, amounting to DKK 871,849,550
nominal value (174,369,910 shares of DKK 5). NTC has no material assets or
liabilities other than its holding of TDC shares, and therefore the merger will
not affect the NTC group's ownership interest in TDC.
In accordance with the International Financial Reporting Standards (IFRS), the
financial statements of the merged company must be based on the values of the
acquiring company (NTC) after implementation of the merger. Certain assets in
NTC's financial statements differ significantly from those in TDC's current
financial statements, as NTC at the time of the acquisition of TDC allocated
the total purchase price for the shares in TDC to the underlying assets and
liabilities, in accordance with IFRS.
Below are key figures of the TDC group for 2008 and the 1Q-3Q 2009 before and
after the merger.(The table of key figures can be found in the attachment)
As it appears, Net income will be lower after the merger. This is attributable
primarily to additional depreciation, mainly due to amortization of customer
relationships. TDC's cash flows will not be impacted by the additional
depreciation.
Upon implementation of the merger, TDC expects revenue for 2009 to be on level
with revenue for 2008 (DKK 35,609 million). Upon implementation of the merger,
TDC also expects net income from continuing operations excluding special items
to be level with the 2008 level (DKK 3,737 million).
On 6 November 2009, TDC announced that the divestment of TDC's 64.6%
shareholding in Invitel is estimated to result in gain of approximately DKK 130
million after tax, which is expected to be recognised in the income statement
under special items related to discontinued operations in 4Q 2009. Upon
implementation of the merger, the sale is estimated to result in a loss of
approximately DKK 120 million after tax.
On 25 November 2009, TDC announced that it has entered into a conditional
agreement to combine its Swiss subsidiary Sunrise Communications SA with Orange
Communications SA, a subsidiary of France Telecom S.A. As a result of a series
of transactions, TDC will receive a payment of EUR 1.5bn at closing from France
Telecom and become a 25% shareholder of the business combination. Upon
implementation of the merger, the transaction is estimated to result in a gain
in the merged company of approximately DKK 3.5 billion after tax, which is
expected to be recognised in the first half of 2010 when the transaction has
been closed.
