European Broadband Company FirstMark Raises $1 Billion

[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.


Lynn Forester, founder and co-chairman of FirstMark Communications Europe,
said the financing would allow FirstMark to pursue its strategy of building
the largest broadband Internet infrastructure in Europe to serve
the needs of small and medium enterprises (SMEs).


“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.

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