Primacom Plans To Sell Dutch Unit Within Weeks -Source
09-16-05 08:12 AM EST
FRANKFURT -(Dow Jones)- German cable television operator Primacom AG (PCAGY) is still pursuing a sale of its Multikabel unit to U.S. private equity firm Warburg Pincus LLC (WBP.XX) for around EUR500 million, a person familiar with the situation told Dow Jones Newswires Friday.
Primacom is targeting a final agreement within weeks, the person said. The person noted that a deal isn't guaranteed, but if the Warburg Pincus talks fail, there's another party interested in buying Multikabel for a similar price. The person didn't disclose the name of the other party.
A preliminary agreement on the Multikabel sale was reached in early April, little over a month after Primacom failed to sell the unit to Swedish buyout firm EQT, people familiar with the matter have said. But the deal couldn't be finalized as not all Primacom lenders had approved the sale.
But late Thursday, Primacom said it has clinched a preliminary settlement with the group of financiers - the so-called junior lenders led by JP Morgan Chase & Co. (JPM) and funds of Apollo Management LP (AM.XX) - that had opposed the sale. Primacom said Thursday it now has their support and has signed a letter of intent on the sale, though it didn't identify the buyer.
The senior lending syndicate, which includes JP Morgan, Barclays PLC (BCS), ING Groep NV (ING) and Fortis Bank NV (30086.AE), agreed to a sale of Multikabel earlier in 2005.
Primacom has made the sale of Multikabel a key element of its financial restructuring. With the proceeds it aims to pay off its senior lenders, which are owed around EUR500 million, while seeking to refinance the EUR375 million debt it owes the junior lenders.
Multikabel, which operates a network north of Amsterdam, generates between EUR75 million and EUR80 million in annual sales. It has an earnings before interest, taxes, depreciation and amortization, or EBITDA, margin of around 60% of sales.
If the purchase agreement with Warburg Pincus is signed within weeks, than the transaction is expected to close before the end of the year, the person added.
Spokespeople for Primacom, which offers TV and high-speed Internet services to 1.4 million subscribers in Germany and the Netherlands, and Warburg Pincus declined to comment.
Company Web site: www.primacom.de
-By Joon Knapen, Dow Jones Newswires; +49-69-29725509; joon.knapen@ dowjones.com (Margot Patrick and Nicole Lee in London contributed to this article.)
(END) Dow Jones Newswires
09-16-050812ET
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