Mkel,
Tescorp came out with a revised S-2 filing today. In addition to Prudential Securities, Lehman Brothers will be a co-underwriter for the sale of additional securities. You know what this means. We reach many more institutional investors, but more importantly, we should have a Lehman Brothers analyst pick up coverage of Tescorp with a "Buy" rating. In addition, this paves the way for Tescorp to do a presentation at a "Lehman Brothers" conference in the near future. In another positive development, the revised S-2 stated in the "Use of Proceeds" section that in addition to "anticipating to acquire a $2.6 million system in the Neuquen Province in Argentina," the Company is "currently in discussions to acquire cable television systems in Argentina for an aggregate of up to $15 million." If these deals go through at approximately $650 per subscriber, Tescorp could soon have another 27,000 subs, which would raise their total subscriber count to 95,000 (an attractive amount of subs for a large player like Hicks, Muse & Tate or Multicanal to consider acquiring). Mkel, consider this for a moment. If Tescorp raises $31.2 million with this offering (11 million shares at $3.315), pays out $17.6 million for acquisitions and $6.4 million to remove the remaining debt from its balance sheet (as mentioned in the S-2 statement), this leaves Tescorp with only $7.2 million in cash. DO I SEE A LARGE DEBT DEAL IN THE WORKS SOMETIME SOON? It makes sense to me. No debt on the balance sheet would reward Tescorp with a favorable interest rate for a $20-50(?) million debt financing deal. Finally, I also hear Tescorp is beginning its roadshow tomorrow, and will complete it by September 25. Let's hope it is well received and the stock price pops sometime soon. |
