All this reflects the improved competitive position, business profile, effectiveness and improved credit indicators with the acquisition of Vodafone Hungary with a significant share of the Hungarian mobile market.
Scope Ratings raised the issuer and debt rating of 4iG Nyrt. (4iG) to the ‘BB-‘ level – the capital market company published on the website of the Budapest Stock Exchange.
The upgrade – which is expected to be confirmed after the closing of the acquisition – reflects the improved competitive position, business profile, effectiveness and improved credit indicators with the acquisition of Vodafone Magyarország with a significant share of the mobile market in Hungary. T
As is known, last November the credit rating agency changed the ‘B+ stable’ rating to a positive outlook, and indicated that it may raise the issuer and bond debt ratings of 4iG. Scope Ratings expects the closing of the Vodafone acquisition in the coming weeks.
“With the upgrade, the 4iG Group’s successful expansion strategy launched in 2021 was also recognized,” underlined Péter Fekete, CEO of the 4iG Nyrt. Group, in connection with the upgrade.
“The acquisitions carried out in the past year and a half have improved the financial indicators of the company group, the purchased companies complement each other well, the company group can exploit a wide range of synergies during the integration process. The company has now become the number one telecommunications service provider in Albania, and with the Vodafone Hungary transaction it has become not only a national champion , but 4iG can become a regional champion.”
With the purchase of Vodafone, the 4iG Group can become the mobile service provider with the second largest subscriber base in Hungary (3.2 million subscribers), as well as the market leader in the broadband, wired internet segment (1.5 million subscribers). With the transaction, the company group can emerge as a complex, mobile-wireline converged service provider.
According to Scope’s calculations, the debt/EBITDA ratio of 4iG Nyrt. may decrease to 4.5 by 2024, and the development of the loan portfolio will contribute to a stable future outlook. The credit rating agency’s analysis predicts a further upgrade in the event of stable integration of recently purchased companies, consolidation of group-level financial operations and moderation of M&A activity – thus the debt/EBITDA ratio may drop significantly below 4. The favorable outcome of the Vodafone transaction can increase the 4iG Group’s EBITDA margin to around 30-35 percent, and the expansion of the company group, as well as its more stable and diversified revenues and the gradual realization of synergies, can further improve operating profitability and the business risk profile. Scope’s analysis stated: 4iG’s loan repayment ability is stable in the long term.