Tim Hellas Pulls Sale; Owners Refinance For Dividend-Sources

LONDON -(Dow Jones)- The private equity owners of Greek mobile operator TIM Hellas Telecommuincations have decided not to sell the company after an auction failed to produce the price they were after, a person close to the deal told Dow Jones Newswires Thursday.

Apax Partners and Texas Pacific Group, who acquired 80.9% of Athens-based TIM Hellas just 18 months ago, are instead raising EUR1.4 billion of bonds to refinance senior debt and to pay themselves a dividend, another person said.

Bidders for the telecom company included Emirates Telecommunications, or Etisalat, Turkish mobile telecommunications company Turkcell Iletisim Hizmetleri and US private equity firm Providence Equity Partners.

Etisalat, which was understood to be the frontrunner in the auction, dropped out of the process earlier this week. Etisalat's offer was around EUR3.8 billion, while that of its nearest competitor, Turkcell, was below EUR3.5 billion, one person said.

The availability of cheap debt from an increasing number of lenders has made it easier for private equity players to refinance their investments and reduce their own financial risk via a special dividend.

Having paid EUR1.1 billion in April 2005 for their initial stake in Athens-based TIM Hellas, the sponsors later acquired all of the remaining shares of TIM Hellas for EUR263.5 million in November of last year.

As long as the market can tolerate more leverage and the company continues to execute on its management and growth plans, there is nothing to stop Apax and Texas Pacific going for a sale or even an IPO further down the road, one source said.

-By Marietta Cauchi, Dow Jones Newswires; +44 207 842 9241; marietta.cauchi@dowjones.com

(Anousha Sakoui and Kate Haywood contributed to this article.)

(END) Dow Jones Newswires"

Posted to the site on 7th December 2006