Contract signature is a complement of the project which has been run in the company for several years with a support from professional advisors. In comparison with the original approach to sell all of its real estate, Telefonica O2 decided to sell only a specific portfolio. The portfolio consists of a mix of administrative and technological buildings located throughout the whole country which are redundant or with a low occupancy. The total area of the sold portfolio amounted to 632 thousand square meters, of which only a small portion will be leased back on the long term basis. Buildings with strategic interest for the company or with high occupancy will stay in Telefonica O2 ownership, while continuously analysis of the utilization of those assets to ensure they are being beneficially employed.

Telefonica O2 focuses on an efficient usage of its assets needed for the core business, which is telecommunications. Following this strategy and further improve efficiency of our business I am happy that we successfully completed this transaction, says Salvador Anglada, the CEO and the Chairman of the Board of Directors when commenting on the deal.

The purchase price of the portfolio exceeds CZK 4 bn. Telefonica O2 expects that after exclusion of the related costs comprising mainly net book value and other transaction costs, total gain from the sale will exceed CZK 0.4 bn and total cash contribution exceeding CZK 3 billion. The complex financial impact will be reflected mainly in the second quarter of 2008. From the second half of 2008 onward the financial results will be impacted also by rental costs paid for space leased back and lower depreciation charge.

In the transaction, Telefonica O2 has been supported by Erste Corporate Finance,a.s. in the area of investment banking and financial advisory, by KNIGHT FRANK, spol. s r.o. in the area of real estate advisory and by Baker & McKenzie, v.o.s. as legal counsel. All three companies rank among the top advisory companies in their areas in the Czech Republic.