Tele Columbus, the third largest German cable operator, gears up for further acquisitions following the recent completion of the takeover of Primacom.
To finance the purchases, the company plans to implement a capital increase. An extraordinary shareholders’ meeting has been arranged for 14 September to decide about the move. The intended gross proceeds from the capital increase amount to €240 million.
“The capital increase enables the company to continue its growth path in Europe’s most attractive cable market and to strengthen its position as the number three player in the German cable market,” Ronny Verhelst, CEO of Tele Columbus, said in Berlin. “We are confident that we will be able to make use of such additional potential in a way which creates value for both the company and its shareholders.”
Without the proposed capital increase, Tele Columbus would currently not be able to provide financing for significant further acquisitions due to the current financing structure of the company.
Should the takeover opportunities arise in the near-term, the proceeds from the capital increase could be directly used to pay the purchase price. Otherwise, the capital could be kept available or could be used to repay existing debt, thereby reducing the debt equity ratio of the company and enabling the company to take out new debt financing when the opportunity of further acquisitions arises.
Industry insiders speculate that Tele Columbus may prepare the takeover of cable operator Pepcom. The company which was acquired by UK-based financial investor Star Capital in 2010 currently serves around 850,000 households throughout Germany.
