FT Orange steps in to help ailing Polish subsidiary

France Telecom (FT) Orange has made an offer of financial help to Poland's largest telecoms operator, Telekomunikacja Polska SA (TPSA), in which FT holds a controlling share.

TPSA, which has recently been rebranded as Orange Poland, said in a statement it had decided to "take advantage of FT's funding capabilities in order to optimise its financial cost." The company, in which FT has a 49 per cent stake, has seen revenues decline since 2007 as competition increased and the country's telecom regulator imposed price reductions on operators, according to Bloomberg.

"Investors are reacting positively to the fact TPSA has managed to organise financing from its parent company," Espirito Santo analyst Konrad Ksiezopolski told Bloomberg. "Liquidity is crucial, especially when all players in the domestic industry are waging a war."

The FT funding will help improve TPSA's financial position; the company has a €400 million credit line maturing this year as well as €700 million of bonds due in 2014.

TPSA recently announced that it may cut up to 5,000 jobs between 2014 and 2016 because of an increasingly harsh economic slowdown and rising competition, according to Reuters.

"Orange Polska has flagged continued workforce cuts in 2014-2016," the Puls Biznesu daily newspaper reported, citing TPSA spokesman Wojciech Jabczynski. "Reduction plans will be the subject for discussions with the unions and that's why we cannot give any details."

The operator said that it expects a "deep fall" in 2013 revenue as Poland undergoes a brutal price war among mobile operators.

For more:
- see this Bloomberg article
- see this Reuters article

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