US investment funds EOS and Viathon have launched a €550 million action against the parent company of Orion Cable, Germany’s third largest operator, which trades under the Primacom and Tele Columbus brands.
German daily Handelsblatt says that if the action is successful it will be the end for Escaline. Quoting industry sources, the newspaper added that the €945 million debt burden held by Tele Columbus has been further compounded by a reduction in estimated 2009 EBITDA from €157 million to €100 million.
The value of the operator has been substantially reduced, where as two years ago the operator was given a valuation of €500 million, this has now been reduced to €350 million. This means that even if the business can be turned around it is unlikely that it would be able to service the debt of its investors.
In the past few weeks TeleColumbus has lost the services of CEO Markus Schimid and the influential board member Robert Fowler.