Earnings

KPN Plans 4 Billion Euro Rights Issue to Cut Debt

Dutch telecoms group KPN plans to cut its debt with a 4-billion-euro ($5.4 billion) cash call to shareholders, it said on Tuesday, after posting a fourth-quarter net loss.

Passengers pass a Royal KPN NV internet centre at Schiphol airport in Amsterdam, Netherlands.
Jock Fistick | Bloomberg via Getty Images

KPN, in which Mexican billionaire Carlos Slim's America Movil took a near 28 percent stake in 2012, said the rights issue was subject to shareholder approval and it may consider raising part of the amount via other means such as equity linked instruments.

KPN said its net debt to core profit ratio stood at 3.0 times at the end of the fourth quarter, and the rights issue would reduce this ratio by about 0.9 points.The group has already made some disposals, most notably its Dutch and German mobile phone towers, but plans to sell entire units in Belgium and Germany were shelved in 2012.

It has also already cut its dividend for 2013 to 0.03 euros per share from previous guidance of 0.35 euros after it had to spend an above-forecast 1.35 billion euros on a mobile frequency auction in the Netherlands in December.

In January, Telekom Austria also partly owned by America Movil, issued 600 million euros of hybrid bonds to cut its debt.KPN posted a net loss of 160 million euros in the fourth quarter, while analysts polled by Reuters had expected a net profit of 357 million euros.