UPC Raises Another US $1.24 Billion

[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

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
and said it came from players who were familiar with UPC’s integrated

Headquartered in Amsterdam, UPC has built up a considerable portfolio of
broadband services in Europe, with operations in western, central and
Europe as well in Israel and Malta. It has a strong presence in Austria,
France, Germany, The Netherlands, Norway, and Sweden, while also operating
in capital cities further east in the Czech Republic, Hungary, Poland,
and the Slovak Republic.

With the largest pan-European cable communication network, UPC see itself as
being very much at the forefront of multimedia communications. Customers,
appear to be happy with the services, as UPC suffers a very modest churn
of just 1 percent for its basic video services.

Investors taking up the latest equity issue are getting convertible
shares at a discount equivalent to an 8 percent dividend yield. What is
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
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.

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