European Broadband Company FirstMark Raises $1 Billion
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[June 8] FirstMark Communications Europe SA announced Thursday the largest private telecoms equity financing in European history -- $1 billion to take the company "well into 2001."
Currently, FirstMark operates a fiber network in Germany connecting 21 cities, but it has ambitious plans to build a pan-European network spanning 18 countries and linking 170 cities. For this it intends to use wireless local loop licenses for "last mile" broadband connectivity.
A group of private investors is taking a $600 million equity stake in the latest round of financing, the rest of the money coming in the form of debt financing commitments. Leading the investment is Welsh, Carson, Anderson & Stowe (WCAS), with major contributions by Kohlberg Kravis Roberts & Co.; Morgan Stanley Dean Witter; and funds affiliated to Goldman Sachs & Co.
FirstMark says it will use the investment to hasten its construction of wireless local loop, xDSL and optical fiber networks in Germany, Spain, Luxembourg, Switzerland and Portugal.
"All countries where we have been granted licenses have committed themselves to economic policies that are favorable to SMEs. The business of FirstMark is to bring to those companies all the power of the digital age," said Forester.
Michael J. Price, FirstMark's other co-chairman, noted that recent market conditions have caused investors to be very selective in their funding choices -- hence $1 billion was an even bigger endorsement than it usually is.
Also on Thursday, FirstMark announced the appointment of directors to represent the new investors, making the Board read like a roll-call of top names. FirstMark Communications's parent company FirstMark Holdings is chaired by MCI WorldCom Chairman Bert Roberts, and its Advisory Board includes former Microsoft Chief Technology Officer Nathan Myhrvold, Lazard Freres Senior Managing Director Vernon Jordan, and Dr. Henry Kissinger.
FirstMark expects to be operational in France, Spain, Portugal and Luxembourg by early 2001.