Greece's Forthnet has offered to buy Wind Hellas in a deal that could value the indebted Greek mobile phone group at about 2 billion euros ($2.91 billion), opening the prospect of a bidding war.
Wind Hellas, which owes lenders 3.2 billion euros, needs to strike a restructuring deal and bring in new investment ahead of a Oct. 15 bond interest payment, and has been in talks with lenders and potential buyers since August.
It is imperative that a transaction is completed on an expedited basis if value is to be preserved, Wind Hellas's parent company said in a separate statement on Friday.
The company said it had received a number of non-binding offers from strategic and financial investors and expected final bids by mid-October.
Forthnet, Greece's second-largest Internet provider, said in a bourse filing its bid was also non-binding.
Wind Hellas, via its parent Hellas Telecommunications II, is a subsidiary of Italian holding company Weather Investments.
Weather, majority owned by Egyptian tycoon Naguib Sawiris, runs a number of telecoms firms in Europe, North Africa and Asia.
Weather Investments may offer to put more money into Wind Hellas, a source with knowledge of the situation said.
Private equity house Apax, which once owned Wind Hellas with its rival TPG [TPG.UL], owns a 10 percent stake in Weather, and has been keeping a close eye on the business. But it will not make an offer on its own, the source said.
Apax declined to comment.
Wind Hellas's finances have been squeezed by falling revenues and pressure on liquidity. It is seeking a substantial equity injection, which is likely to amount to hundreds of millions of euros, alongside a restructuring deal with creditors, a second source with knowledge of the situation said.
Much will depend on Wind Hellas's creditors as varying opinions about the company's value could lead to tough talks between different stakeholders.
A group of bondholders value Wind Hellas closer to 2.5 billion euros but others value the company at less than 1.8 billion euros, which if accepted in a restructuring deal might see bondholders left with nothing.
In August Wind Hellas began talks with lenders and investors. The talks triggered buy-out offers from several investors including one from subordinated bondholders co-ordinated by Aladdin Capital, as Reuters reported on Sept. 22.
Hellas Telecommunications II said on Friday it is talking to the subordinated bondholder group seeking a proposal which includes an equity injection and offers the prospects of higher value than a sale of the shares.
The company said it has also asked bank lenders to accept changes to the terms of a revolving credit facility, including the consent to inject new equity into the business.
(Additional reporting by Simon Meads; Editing by David Cowell and Greg Mahlich)