UPC Raises Another US $1.24 Billion
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[London, ENGLAND] Broadband provider United Pan-Europe Communications N.V. announced Tuesday that it has raised US $1.24 billion in cash via an equity injection.
Putting in the money are Motorola, Liberty Media, parent company UnitedGlobalCom, funds managed by Capital Research and Management, and clients of Alliance Capital.
Mark Schneider, chief executive of UPC, called it "a strong show of support," and said it came from players who were familiar with UPC's integrated strategy.
Headquartered in Amsterdam, UPC has built up a considerable portfolio of broadband services in Europe, with operations in western, central and eastern Europe as well in Israel and Malta. It has a strong presence in Austria, Belgium, France, Germany, The Netherlands, Norway, and Sweden, while also operating in capital cities further east in the Czech Republic, Hungary, Poland, Romania, and the Slovak Republic.
Investors taking up the latest equity issue are getting convertible preference shares at a discount equivalent to an 8 percent dividend yield. What is more: they are also to receive warrants that will enable them to purchase additional ordinary shares in UPC at a premium of 20 per cent to the Conversion Price (set at 35.455 euros).
UPC, which now has over two hundred thousand Internet and data customers in addition to its eight million video subscribers, is currently upgrading its cable systems to 860 Mhz hybrid fiber coaxial cable. This will enable fully interactive two-way traffic across the network -- and is already in place in The Netherlands, Belgium, Austria, and Israel.
UPC believes there are still many growth opportunities in the European telecommunications market, following the 1998 liberalization of the industry in EU countries. Its millions of links to homes and businesses via cable puts it in pole position in the race to supply high-speed Internet access services across Europe.
Majority-owned by UnitedGlobalCom, UPC has concentrated its activities in mainland Europe, although in June this year it announced a deal with Liberty Media to combine international broadband interests -- bringing UPC a 25 percent interest in Telewest Communications plc, the second largest broadband provider in the U.K.