Telekom Austria AG

EANS-Adhoc: Telekom Austria AG
Telekom Austria Group announces capital increase of up to EUR 1 bn net proceeds (Ad-hoc)

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  ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
  distribution. The issuer is solely responsible for the content of this
  announcement.
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Capital measures/Stock Activity
07.11.2014


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN.

Vienna, 7 November 2014: Today, the management board of Telekom Austria
Aktiengesellschaft ("Telekom Austria" and, together with its consolidated
subsidiaries, "Telekom Austria Group"), with the approval of Telekom Austria's
supervisory board, has resolved on a capital increase targeting net proceeds in
the amount of up to EUR 1.0 bn by offering up to 221,500,000 newly issued no-par
value ordinary bearer shares (the "New Shares"). The New Shares will be issued
following a share capital increase from authorized capital and will be carrying
dividend rights as of 1 January 2014, including the intended dividend of EUR
0.05 per share for the financial year 2014. The capital increase will consist of
an offering to existing shareholders (the "Rights Offering"), and potentially
followed by private placements of New Shares to qualified investors in Austria
and other selected countries, including in the United States to qualified
institutional buyers (QIBs) as defined in Rule 144A under the US Securities Act,
and outside of the United States to certain other eligible institutional
investors in reliance on Regulation S under the US Securities Act (the "Rump
Placement" and, together with the Rights Offering, the "Offering").

The Rights Offering will commence on 10 November 2014 and is expected to end on
24 November 2014 (the "Subscription Period"). In the Rights Offering,
shareholders of Telekom Austria holding existing shares of Telekom Austria as of
7 November 2014, 24:00 (midnight) Central European Time, will be granted one
subscription right for each existing share and will be invited to exercise their
subscription rights at a price of EUR 4.57 per New Share (the "Rights Offering
Offer Price"). The subscription ratio is 2 to 1. As a result, shareholders
owning subscriptions rights (or holders of subscription rights) are entitled to
subscribe for 1 New Share for every 2 existing shares of Telekom Austria.
Trading of the subscription rights (ISIN AT0000A1AD41) on the Vienna Stock
Exchange is expected to commence on 12 November 2014 and to end on 19 November
2014. Subscription rights not exercised by the end of the Subscription Period
will expire without the right to any compensation. 

Each of América Móvil, S.A.B. de C.V. ("América Móvil"), Carso Telecom B.V.
("Carso") and Österreichische Industrieholding Aktiengesellschaft ("ÖIAG"),
Telekom Austria's core shareholders, has committed itself to participate in the
capital increase as follows: América Móvil has committed itself to acquire at
the Rights Offering Offer Price 3,967,850 New Shares according to its 7,935,700
subscription rights. Carso Telecom has committed itself to acquire at the Rights
Offering Offer Price 128,267,215 New Shares according to its 256,534,431
subscription rights. ÖIAG has committed itself to acquire at the Rights Offering
Offer Price up to 62,958,867 New Shares according to its 125,917,735
subscription rights such that its participation in the share capital of Telekom
Austria after completion of the capital increase corresponds as closely as
possible to its current pro-rata participation in the Company (approximately
28.42%).

The Rump Placement is expected to commence on 24 November 2014, after the close
of trading on the Vienna Stock Exchange, and to end on 25 November 2014. The
Rump Placement consists of those New Shares which have not been subscribed for
as part of the Rights Offering or committed to by the core shareholders. The
price for the New Shares offered in the Rump Placement is equal to or above the
Rights Offering Offer Price and will be determined on the basis of the outcome
of a bookbuilding procedure. 

Trading of the New Shares on the Vienna Stock Exchange is expected to commence
on 27 November 2014. Each of Telekom Austria, América Móvil, Carso Telecom and
ÖIAG has committed itself to a lock-up period ending six months after the first
day of trading of the New Shares on the Vienna Stock Exchange.

Telekom Austria intends to use the net proceeds of the capital increase to
re-establish its target capital structure and maintain a credit rating of at
least BBB (stable) by Standard & Poor's. This will allow Telekom Austria Group
to pursue strategic investment priorities with the aim to strengthen the Telekom
Austria Group's operational performance and to return to a sustainable growth
profile within the stated sound financial framework. In particular, the capital
increase will allow Telekom Austria Group to implement an accelerated roll-out
of its fibre infrastructure during the years 2015 - 2018 in combination with
latest available technologies to ensure CAPEX efficiency. Telekom Austria Group
thus aims to meet increasing demand for high bandwidth services and safeguard
the Group's network quality leadership in the Austria segment. Furthermore,
Telekom Austria Group will be able to finance value-accretive M&A opportunities
that strengthen its operational strategy, thereby maintaining the following
priorities: (i) in-market consolidation to strengthen existing operations; (ii)
the continued pursuit of Telekom Austria Group's convergence strategy to
diversify in markets that are currently mobile-only and to enhance existing
convergent operations; and (iii) expansion via new operations.

The approval of the prospectus for the capital increase by the Austrian
Financial Market Authority is expected for today. Thereafter the prospectus will
be available, inter alia, for download on Telekom Austria's website
(http://www.telekomaustria.com/en/ir/14887).

Citigroup Global Markets Limited and Deutsche Bank AG are acting as Joint Global
Coordinators and Joint Bookrunners for the transaction. Erste Group Bank AG,
Raiffeisen Centrobank AG and UniCredit Bank Austria AG are acting as Joint
Bookrunners.

For further information please see the following link: 
www.telekomaustria.com/en/ir/ir-news

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This document does not constitute an offer of securities, nor a solicitation for
an offer of securities nor marketing or sales activity for such securities in
countries where such an offer or solicitation for an offer is subject to legal
restrictions. This document must not be used for such an offer or such marketing
activities. Under http://www.telekomaustria.com/en/ir/14887, a prospectus will
be published in accordance with the Austrian Capital Market Act
(Kapitalmarktgesetz).
This document is not for distribution, directly or indirectly, in or into the
United States (including its territories and possessions, any State of the
United States and the District of Columbia). This document does not constitute
or form a part of any offer or solicitation to purchase securities in the United
States. The securities mentioned herein have not been, and will not be,
registered under the United States Securities Act of 1933, as amended, (the
"Securities Act") and may not be offered or sold in the United States, except
pursuant to an exemption from the registration requirements of the Securities
Act. There will be no public offer of securities in the United States. 
This communication is directed only at (i) persons who are outside the United
Kingdom or (ii) persons who have professional experience in matters relating to
investments falling within Article 19(5) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005 (the "Order") and (iii) high net worth
entities, and other persons to whom it may lawfully be communicated, falling
within Article 49(2) of the Order (all such persons together being referred to
as "relevant persons"). Any investment activity to which this communication
relates will only be available to and will only be engaged with, relevant
persons. Any person who is not a relevant person should not act or rely on this
document or any of its contents.

Disclaimer for forward-looking statements: 
This document contains forward-looking statements. These forward-looking
statements are usually accompanied by words such as "believe", "intend",
"anticipate", "plan", "expect" and similar expressions. Actual events may differ
materially from those anticipated in these forward-looking statements as a
result of a number of factors. Forward-looking statements involve inherent risks
and uncertainties. A number of important factors could cause actual results or
outcomes to differ materially from those expressed in any forward-looking
statement. Neither Telekom Austria nor any other person accepts any liability
for any such forward-looking statements. Telekom Austria will not update these
forward-looking statements, whether due to changed factual circumstances,
changes in assumptions or expectations. This report does not constitute a
recommendation or invitation to purchase or sell securities of Telekom Austria.

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Further inquiry note:
Matthias Stieber
Director Investor Relations
Tel.: +43 (0) 50 664 39126
mailto: matthias.stieber@telekomaustria.com

end of announcement                               euro adhoc 
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issuer:      Telekom Austria AG
             Lassallestrasse 9
             A-1020 Wien
mail:     investor.relations@telekomaustria.com
WWW:      www.telekomaustria.com/ir
sector:      Telecommunications
ISIN:        AT0000720008
indexes:     WBI, ATX Prime, ATX
stockmarkets: official market: Wien 
language:   English
 



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