News

The private equity owners of Danish telecommunications operator TDC have announced plans to raise up to DKK 23 billion (USD 4.12 billion) through an almost simultaneous sale and buy-back of shares, the Financial Times reported. But, there have been continuing issues for staff with over 5000 staff cut from TDC since they were bought out 4 years ago.



Danish Telecom Union, DanskMetal reports that NTC (the 5 capital funds who bought 88% of TDC 4 years ago) will sell shares in TDC but no changes are expected in the company. When NTC recently announced they would start selling off their shares in TDC, the employees got some optimism back for the future of TDC. Since the capital funds took over, TDC has gone from a middle size European multinational telecom company, to a nearly entirely national company. Recently they sold off Sunrise in Switzerland, where they were the second largest company after Swisscom. Now TDC has only a few interests left outside Denmark in the Scandinavian countries. During this same period 5000 staff have been cut and all buildings and most equipment has been sold off and then leased back, so not much inner value is left in the company at all.



When NTC today starts the sale of shares it is clear that after the sale as a minimum NTC will still own over 50 % of the shares and keep the control of TDC. Unfortunately, for employees they now really can't expect any major changes in business plans or any improvement in employment conditions at all. Job security is still at risk. Staff cuts have stood at around 8% per year since NTC took over, and staff can expect further cuts in the future. No matter how business is going in general and no matter what service the customers expect to receive, staff should not be treated like this by a company that they have been loyal to. They demand respect and dignity in their workplace and this includes job security in these uncertain times. The Global Financial Crisis is still not over yet. Customers deserve better service, not shrinking service. There is no expectation that NTC will sell off the rest of their shares until the global financial crisis caused recession is well and truly over.



Further background information from Telecom Paper, 26 November 2010:



The share sale, which will be launched on 9 December, would generate the first returns for the consortium of five US and UK private equity groups that bought an 88 percent stake in TDC five years ago. When TDC was bought by Blackstone, Permira, Kohlberg Kravis Roberts, Apax Partners and Providence Equity Partners, it was Europe's biggest leveraged buy-out and provoked an angry reaction from unions and politicians about job cuts at one of Denmark's biggest employers. Now the telecoms operator's private equity owners plan to sell 210 million shares, plus an overallotment option for a further 31.5 million shares, at DKK 47-56 each. The transaction would value the company at about DKK 65 billion, including net debt at about DKK 23 billion. TDC said it would also make a one-off share grant to all staff, worth DKK 12,000 per employee, which would cost the company about DKK 150 million in total.