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2016-12-15

ELTEL: Eltel signs agreement with its banks on temporary reset of financial covenant levels

Eltel has signed an amendment agreement of its existing financing
agreement with its banks on temporary resetting of the leverage
covenant covering the time period from the fourth quarter 2016 until
the end of 2017.

In October, Eltel communicated that challenges in its project business
will result in a significant decline in the Group EBITA for
2016comparedto the level in 2015. In the guidance given in October,
Eltel estimates that Group EBITA for the full year 2016 will be in
the range of EUR 27-32 million, indicating an EBITA for the fourth
quarter in the range of EUR 10-15 million. As a consequence of the
expected lower profit in combination with increased level of net
working capital and consequently higher net debt, Eltel became
exposed to a potential risk of a leverage covenant breach. To manage
this risk, Eltel simultaneously initiated negotiations with its banks
to find a solution.

In the amended agreement signed with the banks, the temporary reset
quarterly leverage (Net Debt/EBITDA) covenant levels vary between
6.30x and 3.60x, covering the time period effective from the
situation at the end of 2016 and extending until the end of 2017.
These reset levels replace the original leverage covenant levels in
the financial agreement signed in 2015 defined at 4.0x Net
Debt/EBITDA for the fourth quarter 2016 and 3.5x starting from the
first quarter 2017. Eltel's bank consortium comprise Skandinaviska
Enskilda Banken (SEB), Danske Bank and OP Corporate Bank.

The agreement is expected to increase Eltel's financial costs by
approximately EUR 4.5 million in 2017, depending on the progress in
restoring Group profitability and reducing working capital.

For further information:
Ingela Ulfves
VP - Investor Relations and Group Communications
Tel: +358 40 311 3009, ingela.ulfves@eltelnetworks.com

This information is information that Eltel AB is obliged to make
public pursuant to the EU Market Abuse Regulation and the Securities
Markets Act. The information was submitted for publication, through
the agency of the contact person set out above, at 8.00 CET on 15
December 2016.

About Eltel
Eltel is a leading European provider of technical services for
critical infrastructure networks - Infranets - in the segments of
Power, Communication and Transport & Security, with operations
throughout the Nordic and Baltic regions, Poland, Germany, the United
Kingdom and Africa. Eltel provides a broad and integrated range of
services, spanning from maintenance and upgrade services to project
deliveries. Eltel has a diverse contract portfolio and a loyal and
growing customer base of large network owners. In 2015 Eltel net
sales amounted to EUR 1,255 million. The current number of employees
is approximately 9,600. Since February 2015, Eltel AB is listed on
Nasdaq Stockholm.

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http://news.cision.com/eltel/r/eltel-signs-agreement-with-its-banks-on-t...
http://mb.cision.com/Main/11435/2150650/604195.pdf

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