Re: European MSO - UPC Raising Billions for Upgrades
Thread- Looks like a pretty big offering to build the coffers to upgrade their coaxial plants. I've posted quite a bit of information on UPC upstream for those interested. My main interest is in keeping in touch with the ability of the European players to finance the upgrades of their plants. So far I have not seen where this will be a problem. That's why I was surprised to hear there was even a rumor(see bottom of article) that Goldman Sachs was even thinking about withdrawing a loan offer? I'm guessing it's not like as implied below. Maybe Goldman wanted a new deal, similar to this convertible? -MikeM(From Florida)
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UPC to Raise Eur 1.43 Billion in Convertible Shares
AMSTERDAM, Sept 12- Cable television operator United Pan-Europe Communications NV said on Tuesday it would sell 1.43 billion euros worth of convertible preference shares to a group of investors to finance its expansion.
The issue comes as Dutch-based UPC, which has been on an acquisition spree and needs to deploy and upgrade its network, has seen its shares drop on market concerns on how it will finance its debt.
UPC shares rose 2.9 percent to 26.75 euros in a slightly weaker overall market. They have recovered from a year low of 17.80 euros touched in May but are still nearly a third of the value at their peak of 77 euros hit in March.
``All in all it's a good deal, especially with the speculation and doubts whether they can finance their strategy,'' said SNS Securities analyst Bert Siebrand.
``It takes away insecurity surrounding the payment of the Telewest deal...and could convince smaller banks to also help underwrite the four billion euro syndicated loan.''
UPC, which secured the loan in May to refinance bank debt and upgrade its networks, bought a 25 percent stake in British cable firm Telewest (TWT.L) in June at an 18 percent premium, but Telewest shares have dropped since.
Apart from UPC-linked companies UnitedGlobalCom(UCOMA), which owns a 51 percent stake in UPC, and Liberty Media Corp(LMGa) which owns a controling stake in UGC, the shares will be placed with a group of investors including Motorola Inc (MOT), funds managed by Capital Research and Management Company and certain clients of Alliance Capital.
``The equity injection will strenghten UPC's balance sheet and further fund the development and execution of the company's business plan,'' Dutch-based UPC said in a statement.
The convertible preference shares will be issued at a discount based on an eight percent dividend yield and will be convertible into ordinary shares of UPC at a price of 35.455 euros.
Apart from the convertible preference shares, the investors will receive warrants to buy UPC ordinary shares at a premium of 20 percent to the conversion price. The total number of warrants equals 15 percent of the total purchase price divided by the conversion price.
UPC last week denied speculation U.S. investment bank Goldman Sachs could withdraw its two billion euros stand-by loan facility. |
