OTE PLC (incorporated with limited liability in England and Wales) HELLENIC TELECOMMUNICATIONS ORGANIZATION S.A.

Transcription

1 Base Prospectus Supplement to the Base Prospectus dated 28 April 2015 OTE PLC (incorporated with limited liability in England and Wales) GUARANTEED BY HELLENIC TELECOMMUNICATIONS ORGANIZATION S.A. (incorporated with limited liability in the Hellenic Republic) 6,500,000,000 GLOBAL MEDIUM TERM NOTE PROGRAMME This base prospectus supplement (the Supplement ) constitutes a supplement within the meaning of Art of Directive 2003/71/EC of 4 November 2003 (as amended), prepared in connection with the 6,500,000,000 Global Medium Term Note Programme (the Programme ) of OTE PLC (the Issuer ) guaranteed by Hellenic Telecommunications Organization S.A. (the Guarantor ) and is supplemental to, forms part of, and must be read in conjunction with, the base prospectus dated 28 April 2015 (the Base Prospectus ) prepared in connection with the Programme. Capitalised terms defined in the Base Prospectus shall, unless the context otherwise requires, have the same meaning when used in this Supplement. Application has been made to the Luxembourg Commission de Surveillance du Secteur Financier (the CSSF ), as competent authority under the Luxembourg Act dated 10 July 2005 relating to Prospectuses for Securities (the Luxembourg Law on Prospectuses for Securities ), to approve this document as a supplement to the Base Prospectus for the purposes of Article 13.1 of the Luxembourg Law on Prospectuses for Securities. The CSSF has approved this Supplement in accordance with Article 7.1 of the Luxembourg Law on Prospectuses for Securities. Investors should note that the CSSF assumes no responsibility as to the economic and financial soundness of any transaction or the quality or solvency of the Issuer in accordance with the provisions of Article 7(7) of the Luxembourg Law on Prospectuses for Securities implementing the Prospectus Directive. This Supplement constitutes neither an offer to sell nor a solicitation of an offer to buy any Notes by any person in any jurisdiction in which it is unlawful for such person to make such an offer of solicitation. In accordance with Article 13 paragraph 2 of the Luxembourg Law on Prospectuses for Securities, investors who have agreed to purchase or subscribe for Securities before this Supplement was published have the right, exercisable within two working days after the date on which this Supplement is published, to withdraw their acceptances. Investors should contact their distributor for further information. This right will expire on 16 November The date of this Base Prospectus Supplement is 12 November 2015.

2 IMPORTANT NOTICES The information herein supplements the information about the Issuer and the Guarantor contained in the Base Prospectus. Save as disclosed in this Supplement, there has been no other significant new factor, material mistake or material inaccuracy relating to information included in the Base Prospectus since its publication. Each of the Issuer and the Guarantor accepts responsibility for the information contained in this document and, to the best of the knowledge and belief of each of the Issuer and the Guarantor (each of which has taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. 2

3 RECENT DEVELOPMENTS The purpose of this Base Prospectus Supplement is to reflect the following changes to the information contained in the Base Prospectus as well as certain amendments to the Base Prospectus. Risk Factors relating to the Guarantor RISK FACTORS Macroeconomic conditions in Greece and the Greek fiscal position have deteriorated markedly. (supplementing certain information under the caption Risk Factors Risk Factors relating to the Guarantor Macroeconomic conditions in Greece and the Greek fiscal position have deteriorated markedly. beginning on page 2 of the Base Prospectus) On 10 June 2015, S&P lowered Greece s long-term credit rating to CCC from CCC+. The rating was further downgraded to CCC- with a negative outlook on 29 June Following the 12 July 2015 Euro Summit agreement, S&P raised Greece s long-term credit rating to CCC+ with a stable outlook, citing the improved liquidity perspective resulting from the agreement. On 28 June 2015, capital controls were imposed in Greece, which currently include weekly limits on all ATM withdrawals and restrictions on payments abroad, including payments by the Guarantor. Although the capital controls were subsequently eased in August 2015 and the limit on payments abroad raised, among other things, payments abroad over 150,000 must still be approved by a special committee composed of representatives of the Greek government, including the Ministry of Finance and the Capital Markets Commission, the Bank of Greece (the Greek central bank) and the Union of Greek Banks, and documentation must be submitted in support of an approval request. Although the Issuer and the Guarantor believe that they currently have sufficient funds outside of Greece to fund payments on the Notes, if, in the future, the Issuer required financial support from the Guarantor to make payments on the Notes or the Guarantor was required to make payments under the Guarantee and capital controls remained in place, any such payment from the Guarantor to the Issuer would require the approval of the special committee. In addition, published reports indicate that since the imposition of the capital controls, certain Greek businesses have found suppliers and other partners outside of Greece reluctant to continue relationships with Greek businesses on the same terms as prior to the imposition of capital controls or at all. Although the Guarantor has thus far not been materially affected by any such issues, there can be no guarantee that it will not be so affected in the future. Furthermore, as a result of the imposition of capital controls, the Guarantor s liquidity may be impacted as a result of residential, corporate and public sector customers delaying payments on their obligations. It is uncertain how long Greece will continue to maintain capital controls. While capital controls are in place the Guarantor s liquidity and credit risk may be affected. On 1 July 2015, Moody s downgraded Greece s long-term credit rating to Caa3 from Caa2 and placed Greece s rating on review for further downgrade, citing a fall in the probability of continued financial support for Greece. On 25 September 2015, Moody s assigned a stable outlook to Greece s credit rating. Greece held a referendum on 5 July 2015 on the question of whether Greece should accept or reject conditions to further economic assistance as proposed by the European Commission, IMF and the ECB. The results of the referendum were 61% of those voting against accepting the conditions and 39% voting for accepting the conditions. Following negotiations, on 12 July 2015, the Euro Summit agreed further financial assistance to Greece from the ESM, conditional upon the Greek Parliament approving certain economic reforms. As of 14 August 2015, Greece s government had approved, in principle, the economic reforms required to receive funding of 86.0 billion as part of a third economic assistance program. On 20 September 2015, Greece held parliamentary elections after the government s resignation one month earlier. The ruling party, Syriza, retained leadership in a coalition government. The elections in September 2015 were the fourth parliamentary elections Greece has held since On 9 November 2015, the finance ministers of the Eurozone countries voted to delay the disbursement of 2 billion in financing intended to assist the Greek State in the payment of certain domestic obligations, citing certain economic reforms that were not yet fully implemented. A failure by the Greek State to enact the necessary reforms could result in 3

4 a delay in the State s ability to pay salaries and bills, which may impact the disposable income of the Guarantor s customers and result in reduced demand for the Guarantor s products and services. Greece has, and may continue to, adopt fiscal measures that adversely affect the Guarantor. (supplementing certain information under the caption Risk Factors Risk Factors relating to the Guarantor Greece has, and may continue to, adopt fiscal measures that adversely affect the Guarantor. beginning on page 3 of the Base Prospectus) In July and August 2015, the Greek government introduced Law 4334/2015 and Law 4336/2015, respectively, which modified the income tax code introduced in July 2013 as Law 4172/2013. Among the changes to the tax code are an increase in the corporate income tax rate from 26% to 29% and an increase in the percentage of corporate income tax paid in advance from 80% to 100% of tax due. These changes apply retroactively to any profits derived from accounting periods after 1 January Certain provisions of the modified tax code have increased the taxation of individuals and the VAT rate on a number of products and services. Although the impact of the above increases has not been quantified yet, such increases may reduce disposable income levels of the Guarantor s customers in Greece, which could, in turn, result in reduced retail demand for the Guarantor s products and services. There can be no assurance that other fiscal measures aimed at raising funds will not be implemented, which could have an adverse effect on the Guarantor s financial condition. Any future ratings downgrade may impair the Guarantor s ability to obtain financing and increase its cost of debt. (modifying certain information under the caption Risk Factors Risk Factors relating to the Guarantor Any future ratings downgrade may impair the Guarantor s ability to obtain financing and increase its cost of debt. beginning on page 4 of the Base Prospectus) The long-term credit ratings assigned to the Guarantor are B+ (stable) by S&P and Caa2 (stable) by Moody s. On 4 May 2015, Moody s downgraded the Guarantor s long-term rating to B3 with a negative outlook and further downgraded the Guarantor s long-term rating to Caa2 on 2 July 2015 following its downgrade of Greece s long-term rating from Caa2 to Caa3 on 1 July On 4 June 2015, S&P downgraded the Guarantor s long-term rating to B+ from BB- with a negative outlook. On 1 July 2015, S&P downgraded the Guarantor s long-term rating to B from B+ with a negative outlook. On 18 September 2015, S&P raised the Guarantor s long-term rating to B+ with a stable outlook from B citing that the reduced likelihood that Greece would leave the Euro Zone. On 29 September 2015, Moody s assigned a stable outlook to the Guarantor s ratings. Notes issued under the Programme may be rated or unrated. Where a Tranche of Notes is rated, such rating will not necessarily be the same as the rating(s) assigned to Notes already issued. Where a Series or Tranche of Notes is rated, the applicable rating(s) will be specified in the relevant Final Terms. Whether or not each credit rating applied for in relation to a relevant Series or Tranche of Notes will be (1) issued by a credit rating agency established in the EEA and registered under the CRA Regulation, or (2) issued by a credit rating agency which is not established in the EEA but endorsed by a CRA which is established in the EEA and registered under the CRA Regulation or (3) issued by a credit rating agency which is not established in the EEA but which is certified under the CRA Regulation will be disclosed in the Final Terms. In general, European regulated investors are restricted from using a rating for regulatory purposes if such rating is not issued by a credit rating agency established in the EEA and registered under the CRA Regulation unless (i) the rating is provided by a credit rating agency not established in the EEA but is endorsed by a credit rating agency established in the EEA and registered under the CRA Regulation or (ii) the rating is provided by a credit rating agency not established in the EEA which is certified under the CRA Regulation. A list of credit rating agencies registered in accordance with the CRA Regulation is available on the website of the ESMA at A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating agency. 4

5 The regulatory environment for telecommunications services remains complex and subject to change and interpretation, and the Guarantor s compliance with the regulations to which it is or may become subject may require it to expend substantial resources and may have a significant impact on its business decisions. (supplementing certain information under the caption Risk Factors Risk Factors relating to the Guarantor The regulatory environment for telecommunications services remains complex and subject to change and interpretation, and the Guarantor s compliance with the regulations to which it is or may become subject may require it to expend substantial resources and may have a significant impact on its business decisions. beginning on page 5 of the Base Prospectus) In January 2015, the president of the HTPC resigned, and no replacement has been named to date. As a result, the Plenary of the HTPC has not convened since June 2015, which has, in turn, resulted in delays in issuing regulatory decisions, which has, in turn, had a impact on the Guarantor s ability to plan for future developments. Cosmote s commercial operations could be constrained by regulatory interventions by the HTPC or other regulatory authorities. (supplementing certain information under the caption Risk Factors Risk Factors relating to the Guarantor Cosmote s commercial operations could be constrained by regulatory interventions by the HTPC or other regulatory authorities. beginning on page 14 of the Base Prospectus) On 27 October 2015, the European Parliament voted to adopt the Telecoms Single Market Regulation. This regulation would (i) abolish retail international mobile telephone roaming charges by mid-2017 and (ii) impose net neutrality at the EU level. Although the impact on the Guarantor of the implementation of this regulation has not yet been calculated, a reduction in mobile telephone roaming charges may adversely affect the Guarantor s business, results of operations, financial condition and prospects. In addition, the European Commission has indicated that the adoption of this regulation is an essential condition to its review of the EU-wide regulatory framework for electronic communications, which is now expected to begin with an initial proposal in mid Although there can be no certainty as to what the results of any such review will be, there can be no assurance that this review will not result in regulatory changes that could adversely affect the Guarantor s business, results of operations, financial condition and prospects. 5

6 INFORMATION INCORPORATED BY REFERENCE With effect from the date of this Supplement the information appearing in, or incorporated by reference into, the Base Prospectus shall be supplemented in the manner described below. The following information shall be deemed to be incorporated by reference in, and to form part of, the Base Prospectus as supplemented by this Supplement: (i) the unaudited interim condensed consolidated IFRS financial statements of the Guarantor in respect of the six months ended 30 June 2015 (the Guarantor s 2015 H1 Financial Statements ); and (ii) the unaudited interim condensed consolidated IFRS financial statements of the Guarantor in respect of the nine months ended 30 September 2015 (the Guarantor s 2015 Q3 Financial Statements ). Guarantor s 2015 H1 Financial Statements Page Interim Statement of Financial Position Interim Income Statement Interim Statement of Cash Flows Notes to the Interim Condensed Financial Statements Guarantors 2015 Q3 Financial Statements Page Interim Statement of Financial Position... 3 Interim Income Statement... 4 Interim Statement of Cash Flows... 9 Notes to the Interim Condensed Financial Statements The information incorporated by reference that is not included in the cross-reference list is considered as additional information and is not required by the relevant schedules of the Prospectus Regulation. 6

7 DESCRIPTION OF THE GUARANTOR Recent Macroeconomic Events affecting Greece (Supplementing certain information under the caption Description of the Guarantor Recent Macroeconomic Events affecting Greece beginning on page 70 of the Base Prospectus) On 10 June 2015, S&P lowered Greece s long-term credit rating to CCC from CCC+. The rating was further downgraded to CCC- with a negative outlook on 29 June Following the 12 July 2015 Euro Summit agreement, S&P raised Greece s long-term credit rating to CCC+ with a stable outlook, citing improved liquidity resulting from the agreement. On 28 June 2015, capital controls were imposed in Greece, which currently include weekly limits on all ATM withdrawals and restrictions on payments abroad, including payments by the Guarantor. Although the capital controls were subsequently eased in August 2015 and the limit on payments abroad raised, among other things, payments abroad over 150,000 must still be approved by a special committee composed of representatives of the Greek government, including the Ministry of Finance and the Capital Markets Commission, the Bank of Greece (the Greek central bank) and the Union of Greek Banks, and documentation must be submitted in support of an approval request. As a result of the imposition of capital controls, published reports indicate that certain Greek businesses have found suppliers and other partners outside of Greece reluctant to continue relationships with Greek businesses on the same terms as prior to the imposition of capital controls or at all. It is uncertain how long Greece will continue to maintain capital controls. On 1 July 2015, Moody s downgraded Greece s long-term credit rating to Caa3 from Caa2 and placed Greece s rating on review for further downgrade, citing a fall in the probability of continued financial support for Greece. On 25 September 2015, Moody s assigned a stable outlook to Greece s credit rating. Greece held a referendum on 5 July 2015 on the question of whether Greece should accept or reject conditions to further economic assistance as proposed by the European Commission, IMF and the ECB. The results of the referendum were 61% of those voting against accepting the conditions and 39% voting for accepting the conditions. Following negotiations, on 12 July 2015, the Euro Summit agreed further financial assistance to Greece from the ESM, conditional upon the Greek Parliament approving certain economic reforms. As of 14 August 2015, Greece s government had approved, in principle, the economic reforms required to receive funding of 86.0 billion as part of a third economic assistance program. On 20 September 2015, Greece held parliamentary elections after the government s resignation one month earlier. The ruling party, Syriza, retained leadership in a coalition government. The elections in September 2015 were the fourth parliamentary elections Greece has held since On 9 November 2015, the finance ministers of the Eurozone countries voted to delay the disbursement of 2 billion in financing intended to assist the Greek State in the payment of certain domestic obligations, citing that certain economic reforms that were not yet fully implemented. Business Overview (Supplementing certain information under the caption Description of the Guarantor Business Overview beginning on page 72 of the Base Prospectus) In October 2015, the Guarantor announced that it will adopt the Cosmote brand as a uniform consumer brand covering fixed-line services and mobile services in Greece, as well as all customer service channels, such as call centres, websites and retail. Directors and Senior Management Board of Directors (Supplementing certain information under the caption Description of the Guarantor Directors and Senior Management Board of Directors beginning on page 92 of the Base Prospectus) On 12 June 2015, a general meeting of shareholders elected Mr Panagiotis Skevofylax as a member of the Guarantor s Board of Directors, replacing Mr Ioannis Margaris. Mr Skevofylax, 32, is an independent director, and his term expires in At the same general meeting, all other members of the Board of Directors were re-elected to terms expiring in Panagiotis Skevofylax is a special adviser in the Office of the Deputy Prime Minister of the Greek government. From June 2014 to February 2015, he was a special adviser in the Parliament s 4 th Deputy Speaker s Office. Mr Skevofylax holds an M.A. in Media and Communications from City University London (with a specialisation in the political 7

8 economy of the media and communications) and two M.Sc.s from the National and Kapodistrian University of Athens in Political Science and Sociology (with a specialisation in Political Analysis) and European and International Studies (with a specialisation in European Affairs). Mr Skevofylax has also worked as a strategic communications consultant, focusing on political and policy analysis, political consulting and coaching, political campaigning and integrated communications planning. Employees Voluntary Exit Schemes (Supplementing certain information under the caption Description of the Guarantor Employees Voluntary Exit Schemes beginning on page 98 of the Base Prospectus) On 22 May 2015, the Guarantor announced the implementation of a voluntary leave scheme mainly addressed to employees close to their retirement age. The scheme was completed in June 2015, when the participating employees ceased their employment with the Guarantor. The voluntary leave scheme cost the Guarantor 75.0 million. Legal Proceedings Telenor claim against Cosmote and Germanos (Supplementing certain information under the caption Description of the Guarantor Legal Proceedings Telenor Claim against Cosmote and Germanos beginning on page 101 of the Base Prospectus) Telenor notified Cosmote that it reduced its claim to 9.6 million, reserving the right to raise further claims depending on the outcome of pending legal and tax cases. The Guarantor is evaluating Telenor s reduced claim. HTPC Notification (supplementing certain information under the caption Description of the Guarantor Legal Proceedings HTPC Notification beginning on page 100 of the Base Prospectus) On 15 May 2015, Cosmote submitted an appeal before the Administrative Court of Appeal in Athens contesting the 1.2 million fine handed down by the HTPC on 20 March Regulations Telecommunications Services Regulation in Greece (supplementing certain information under the caption Description of the Guarantor Regulation Telecommunications Services Regulation in Greece beginning on page 101 of the Base Prospectus) On 13 October 2015, the HCC carried out an investigation at the offices of the Guarantor as part of an investigation into violations of competition laws. The investigation relates to bids submitted by Guarantor as a member of a union of companies pursuant to a series of tenders conducted by city bus cooperatives throughout Greece. The Guarantor was informed that the investigation is the product of a complaint regarding bid rigging and customer allocation, although it has no further information regarding the investigation. Competition Council of Romania (supplementing certain information under the caption Description of the Guarantor Regulation Competition Council of Romania beginning on page 102 of the Base Prospectus) On 30 June 2015, a final proposal for commitments was submitted by Telekom Romania Mobile to the Competition Council. The Competition Council accepted the proposal and as a result of which Telekom Romania Mobile will not be fined by the Competition Council. Under its agreement with the Competition Council, independent inspectors will conduct an analysis of Telekom Romania Mobile s operations to ensure that the agreed-upon commitments are being implemented and to determine the effectiveness of the commitments on the market. Telekom Romania Mobile was given a deadline of 30 October 2015 to construct a suitable study of the market and nominate appropriate independent inspectors to conduct the market study. Telekom Romania Mobile submitted a proposed study to the Competition Council within the deadline. On 10 November 2015, Telekom Romania Mobile nominated independent inspectors to conduct the study. 8

9 GENERAL INFORMATION Significant Change Save as disclosed in this Supplement, there has been no significant change in the financial or trading position of the Issuer since 30 June 2015, or of the Guarantor and its subsidiaries since 30 September Litigation Save as disclosed in Note 15 to the Guarantor s 2015 Q3 Financial Statements, which are incorporated by reference herein, and (ii) on pages 99 to 101 of the Base Prospectus in the section entitled Description of the Guarantor Legal Proceedings, on page 101 of the Base Prospectus in the section entitled Description of the Guarantor Regulation Competition Authority of Albania and on page 102 of the Base Prospectus in the section entitled Description of the Guarantor Regulation Competition Council of Romania, neither the Issuer, the Guarantor, nor any of their subsidiaries is or has been involved in any governmental, legal or arbitration proceedings (including any proceedings which are pending or threatened of which the Guarantor or Issuer is aware) which may have or have had in the 12 months preceding the date of this Supplement a significant effect on the financial position or profitability of the Issuer, or of the Guarantor and its subsidiaries. Document Available for Inspection So long as the Programme remains in effect or any Notes shall be outstanding, copies of this Supplement and the document incorporated by reference herein will be available (i) during normal business hours without charge from the specified office of the Fiscal Agent and the Paying Agent in Luxembourg; and (ii) on the website of the Luxembourg Stock Exchange at General To the extent that there is any inconsistency between any statement in this Supplement and any statement in or incorporated by reference into the Base Prospectus, the statements in this Supplement shall prevail. 9

10 REGISTERED OFFICE OF THE ISSUER OTE PLC Wilmington Trust SP Services (London) Limited 3 rd Floor 1 King s Arms Yard London EC2R 7AF REGISTERED OFFICE OF THE GUARANTOR Hellenic Telecommunications Organization S.A. 99 Kifissias Avenue GR Amaroussion Athens Greece FISCAL AGENT The Bank of New York Mellon One Canada Square London El4 5AL PAYING AGENTS The Bank of New York Mellon One Canada Square London E14 5AL The Bank of New York Mellon Corporate Trust Department 21 st West 101 Barclay Street New York, NY Banque Internationale á Luxembourg sociéte anonyme 69, route d Esch L-2953 Luxembourg REGISTRAR AND EXCHANGE AGENT The Bank of New York Mellon Corporate Trust Department 21 st West 101 Barclay Street New York, NY TRANSFER AGENTS The Bank of New York Mellon Corporate Trust Department 21 st West 101 Barclay Street New York, NY Banque Internationale á Luxembourg sociéte anonyme 69, route d Esch L-2953 Luxembourg