Go planning two business centres

Go is planning to turn its former HQ Spencer House in Marsa and its premises in Birkirkara into business centres to be leased as premium office space to third parties.

CEO Yiannos Michaelides said that the telecoms operator had finally made key decisions on what to do with its €50 million property portfolio – which first necessitated a thorough review of its operational requirements.

It is now at an advanced stage of the Mepa permit application process for Birkirkara and Marsa, and has also decided to move its exchanges in both Sliema and St Paul’s Bay to new, considerably smaller premises next year, freeing up the existing exchanges for other options.

The properties had been transferred to a special purpose vehicle called Malta Properties, which is being kept as a separate and independent business entity.

“Once all the permits are in hand, we will be able to start calculating the rents or income that these properties can generate,” he said.

Its ?ejtun site had originally been on the list for possible alternative use but Go has decided to retain it as a core part of Go operations, turning it into a technical hub.

Mr Michaelides said that the company’s diversification strategy was working, noting that the average Ebitda margin for a number of operators in the last quarter of 2014 was 28.8 per cent while Go’s was 40 per cent.

Diversification has not always been a success: its multimillion euro investment in Forthnet had to be completely written off, although shareholders might see some of that money come back as both Vodafone Greece and Wind are interested in buying it.

“There was a story in Greek newspapers last week that Vodafone is still interested in buying it. The two bidders have already made non-binding bids. They then completed a due diligence process and it is now up to them whether to make a binding bid. It is only at that stage that the board would decide whether to sell and whether the bid is a fair value.“We are waiting – there is no deadline. All that is happening in Greece at the moment is overshadowing this...” he admitted.

He is confident that Go’s investment in Cypriot Cablenet, which has 47,000 subscribers, is completely different.

“Irrespective of what happened in the past, if you make a prudent, small and manageable investment, then it can prove to be worthwhile. Cablenet was an investment that the Go balance sheet could take comfortably. The company has a double digit growth story and its performance is meeting expectations. The Cypriot economy was at the bottom when we made the investment but it has been improving steadily and 18 months later we can say with confidence that our choice was correct.

“Eventually it could surpass Go. We have the option to take a majority shareholding and consolidate the numbers. We will make the decision at the right time. It could generate important revenue for Go.”

Go recently reported a profit before tax for 2014 of €20.3 million, up 30 per cent over 2013.

Source: Times of Malta


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