UTI Grup SA and UTI Netcity Investments announce the sale of Netcity Telecom
The transaction involves the acquisition of the entire share package by Direct One S.A. The transaction follows all the legal phases and is submitted to the approval of the Competition Council.
Netcity Telecom is the operator of the underground fiber optic communication infrastructure in Bucharest – Netcity, being responsible for its design, development, and operation, based on a concession agreement signed in 2008 with the City Hall of Bucharest. The City Hall gives Netcity Telecom the right to use the public space for 49 years and cashes in royalties amounting to 12% of the revenues of Netcity Telecom – the largest royalties in Romania.
UTI Grup SA has made use of important financial and human resources in the implementation of this revolutionary and unique project in Romania, proving that long-term public-private partnership can solve the acute needs of the local communities.
The project, its awarding and operation have been repeatedly audited by the European Commission, while the issued reports acknowledge its compliance with the European legislation and standards.
The Netcity project is one of the most ambitious and useful projects implemented in Bucharest, being vital for the good development of the communications services. It has allowed easy access to the citizens to media content, has eradicated the monopoly of the telecom operators, has led to the reduction of the internet and TV subscriptions and has contributed to the aesthetics of the city.
Besides the material investments, Netcity stands for the expertise and effort of an ambitious and visionary team.
We think that Netcity will continue to develop and we are proud to have been the pioneers of a project of such importance for the municipality, the telecom operators and the residents of Bucharest.
To this day, the investment provided by UTI Grup and UTI Netcity Investments has exceeded 40 million euros. The network length is 900 km and covers the central area of Bucharest. The royalties paid to the City Hall amount to 4 million Euro as of the date of the transaction.
Netcity coverage on September 1, 2016
We are glad that Direct One – a Romanian company- has taken over the project and intend to further develop it in compliance with the stipulations of the concession contract.
KPMG Romania has ave been the financial adviser for UTI Grup and PwC provided financial assistance for Direct One. For legal matters, Direct One have been assisted by Țuca, Zbârcea and the Associates, while UTI Grup has been assisted by Leaua and the Associates.
