NETANYA, Israel, Aug. 8, 2018 /PRNewswire/ --
Cellcom Israel Ltd. (NYSE: CEL) (TASE: CEL) (hereinafter: the
"Company") announced today that following the Company's previous
reports regarding a possible investment in Israel Broadband Company, or IBC, the Company,
the Israeli Electric Company, or IEC, IBC and the other
shareholders and main creditors of IBC have entered a memorandum of
understanding, or MOU, for investment of the Company in IBC. IBC's
licenses provide IBC the exclusive right to deploy fiber optic over
IEC's infrastructure.
Nir Sztern, the Company's CEO
said: "Cellcom Israel's investment in IBC will allow its continued
operation and the ability to initially offer fiber-optic internet
services to approximately 150,000 households in IBC's current
deployment areas. Our objective for Cellcom Israel and IBC's
fiber-optic deployment is reaching over 500,000 households in 3
years, reaching approximately 900,000 and 1,200,000 households
after 5 and 10 years, respectively."
The MOU outlines the principles of the transaction contemplated
by the parties and in addition to standard and customary conditions
contains the following stipulations:
- The Transaction: For a total amount of approximately
NIS 100 million, or the
Consideration, the Company (by itself or with a group of investors
it may arrange) will own 70% of IBC's issued and outstanding share
capital and the other 30% of IBC's issued and outstanding share
capital will be owned by IEC. The Consideration shall be used to
settle generally all of IBC's debts.
- The transaction is subject to entering a definitive agreement
and certain other documentation (including an updated agreement of
IBC with IEC and an IRU broadband service agreement between Cellcom
and IBC), or the Agreement, within a certain period from the MOU
execution.
- The MOU also contains certain precedent conditions to the
closing of the transaction, including regulatory approvals
(including with regards to the change of IBC's deployment
obligations) and tax arrangements.
The terms of an Agreement are subject to further negotiations
between the parties and approval of the Company's Board of
Directors. If entered, the execution of the transaction will be
subject to the said precedent conditions, including regulatory
approvals. There is no assurance that the parties will enter an
Agreement, or that such Agreement will be approved and executed,
nor as to its timing and terms.
Nir Sztern, the Company's CEO
also said, "After bringing the "new TV" message to the residences
of Israel, in a "fit for all"
price and generated competition in that market, we aim to be the
engine of competition in the fiber-optic arena, to advance
Israel into a new technology age.
Our investment in fiber-optics in various paths provides us the
means to make significant savings in the amounts paid for internet
infrastructure usage to Bezeq and offer additional products and
services. IBC has several advantages in that regard, including a
very attractive fiber-optic deployment cost in areas of upper
electricity infrastructure (approximately 60% of the buildings in
Israel) and in new neighborhoods.
Fiber-optic infrastructure deployment through IEC's high quality
professional personnel, alongside IBC's high quality and
professional employees, will enable it to supply internet
infrastructure services of up to 1 gigabyte per second to
operators, by way of wholesale service and/or long term usage
rights (IRU). "
For additional details see the Company's annual report for the
year ended December 31, 2017 on Form
20-F dated March 26, 2018 under "Item
3. Key Information – D. Risk factors – Risks related to our
business - We face intense competition in all aspects of our
business", "- Our investment in new businesses involves many risks"
and "Item 4. Information on the Company –B. Business Overview –
Competition – Fixed-Line Segment- Fixed-Line Infrastructure".
Forward looking statement
The information included in this press release contains, or may
be deemed to contain, forward-looking statements (as defined in the
U.S. Private Securities Litigation Reform Act of 1995 and the
Israeli Securities Law, 1968). Said forward-looking statements,
relating to the potential transaction and execution thereof and the
benefits therefrom, and objectives for fiber-optic deployment, are
subject to uncertainties and assumptions about the completion of
the negotiations, approval of the transaction by the Company's
board of directors, the completion of the precedent conditions
including the receipt of the necessary approvals, the ability
to carry out future plans as to IBC and Cellcom Israel, and the
Israeli telecommunication regulation and market condition. The
actual conditions the Company may face could lead to materially
different outcome than that set forth above.
About Cellcom Israel
Cellcom Israel Ltd., established in 1994, is the largest Israeli
cellular provider; Cellcom Israel provides its approximately 2.822
million cellular subscribers (as at March
31, 2018) with a broad range of value added services
including cellular telephony, roaming services for tourists in
Israel and for its subscribers
abroad and additional services in the areas of music, video, mobile
office etc., based on Cellcom Israel's technologically advanced
infrastructure. The Company operates an LTE 4 generation network
and an HSPA 3.5 Generation network enabling advanced high speed
broadband multimedia services, in addition to GSM/GPRS/EDGE
networks. Cellcom Israel offers Israel's broadest and largest customer service
infrastructure including telephone customer service centers, retail
stores, and service and sale centers, distributed nationwide.
Through its broad customer service network Cellcom Israel offers
technical support, account information, direct to the door parcel
delivery services, internet and fax services, dedicated centers for
hearing impaired, etc. Cellcom Israel further provides OTT TV
services, internet infrastructure and connectivity services and
international calling services, as well as landline telephone
communications services in Israel,
in addition to data communications services. Cellcom Israel's
shares are traded both on the New York Stock Exchange (CEL) and the
Tel Aviv Stock Exchange (CEL). For additional information please
visit the Company's website
http://investors.cellcom.co.il.
Company
Contact
Shlomi
Fruhling
Chief Financial
Officer
investors@cellcom.co.il
Tel:
+972-52-998-9735
|
Investor Relations
Contact
Ehud Helft
GK Investor &
Public Relations In partnership with LHA
cellcom@GKIR.com
Tel:
+1-617-418-3096
|
View original
content:http://www.prnewswire.com/news-releases/cellcom-israel-announces-mou-for-investment-in-ibc-300693832.html
SOURCE Cellcom Israel Ltd.