UPC Completes US $1.24 Billion Funding Round

[London, ENGLAND] United Pan-Europe Communications (UPC) announced
Monday that it has secured US $1.24 billion in additional funding
from its investment partners.

To raise the money, UPC has issued convertible preference shares for
cash, the offer being taken up by Liberty Media Corporation, Motorola,
Inc., UnitedGlobalCom, funds managed by Capital Research and Management
Company, and somes clients of Alliance Capital.

The announcement comes just a week after UPC and [email protected] abandoned
their deal to create Excite Chello, a venture that would have created
one of the largest broadband companies in the world.

“The completion of this financing, which includes a notable combination
of industry and financial players, strengthens UPC’s balance sheet and
provides significant capital for the continued execution of our core
‘triple-play’ broadband business in Europe,” said Mark Schneider,
chairman and chief executive of UPC.

The investors will be able to convert their new preference shares into
ordinary UPC shares of UPC at a price of Eur 35.455 (approx. US $30),
while earning an 8 percent dividend in the meantime.

The deal for investors is further sweetened by the issuing of warrants which
they can use for the purchase of ordinary UPC shares at a premium of 20
percent to the conversion price. If the shares have not been converted after 12
years, UPC will be required to redeem them.

UPC has not revealed the amount of investments being made by each
company, although it is clear that much of the funding comes from
John Malone’s Liberty Media Corporation. Malone is a keen supporter
of UPC’s broadband operation chello, which has expanded rapidly in
Europe and now has more than 0.3 million broadband Internet subscribers.

Headquartered in Amsterdam, UPC operates broadband communications networks
in 17 countries in Europe as well as in Israel. Its chello subsidiary also
distributes broadband by cable in New Zealand and Chile, and has a wireless
and satellite operation in Australia.

UPC shares are traded on the Amsterdam Stock Exchange and NASDAQ.

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