Unitedglobalcom (NASDAQ:UCOMA)
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Chilean Operation VTR Completes Merger with Metropolis Intercom,
Names New CEO and Secures New Financing
DENVER, April 14 /PRNewswire-FirstCall/ -- UnitedGlobalCom, Inc. ("UGC" or
"the Company") (NASDAQ:UCOMA), announced today that its Chilean subsidiary, VTR
GlobalCom S.A. ("VTR"), has completed its merger with Metropolis Intercom S.A.
("Metropolis") further strengthening its position as Chile's leading broadband
services provider. Prior to the merger, Metropolis was owned 50% by Liberty
Media International, Inc. ("LMI") and 50% by Cristalerias de Chile S.A.
("Cristalerias").
In exchange for its interest in Metropolis, Cristalerias received a 20%
interest in VTR and an option to require UGC to purchase its equity interest in
VTR at fair market value, subject to a US$140 million floor price. This put
option, which is payable in cash or UGC stock, at UGC's option, may be
exercised at any time between the first and tenth anniversary of the closing
date. For its interest in Metropolis, LMI received VTR indebtedness valued at
approximately US$100 million.
UGC has also agreed with LMI that UGC will acquire the $100 million VTR
indebtedness from LMI if the proposed business combination between UGC and LMI
announced on January 18, 2004 does not close. The purchase price to be paid by
UGC for that indebtedness would be 10 million shares of Class A common stock of
UGC at $10.00 per share.
In connection with the merger, VTR also assumed Metropolis indebtedness owed to
Cristalerias and LMI with an aggregate value of approximately US$21 million and
issued approximately US$55 million of shareholder debt to UGC.
As a result of the merger, VTR will add 275,000 revenue generating units
("RGU's") to VTR's 1,005,000 RGU's, as of December 31, 2004, for a total of
approximately 1,280,000 RGU's, including 744,000 video customers, 215,000
broadband Internet customers and 321,000 telephony customers.
Mike Fries, President and CEO of UGC said, "We are very pleased to have finally
completed this merger and we can now begin the process of integrating the two
companies. We are focused on quickly achieving the substantial merger
synergies which include not only the elimination of a large number of
duplicative network and operating expenses, but also the ability to sell VTR's
highly successful triple-play products to the Metropolis customer base. The
combined company will be a clear leader in the Chilean market for video and
broadband voice and data services".
The terms of the transaction were approved by a special committee of
independent directors of the UGC Board, which was advised by Morgan Stanley.
In connection with the merger, UGC also announced that Mateo Budinich has been
named Chief Executive Officer at VTR. Mr. Budinich was formerly Director
General for the Americas at Telefonica Data and, most recently, Director of
Fundacion Chile. Commenting on Mr. Budinich, Mr. Fries said: "Mateo has had a
long and successful career in the Chilean and Latin American technology and
telecom industry. Given his proven track record, I am confident that Mateo is
the right person to lead VTR into this new era".
Mr. Fries also commented on the departure of Blas Tomic, former Chief Executive
Officer of VTR: "Blas has overseen a fantastic track record of financial and
customer growth at VTR over the last six years. We are sad to see Blas leave
and wish him the best in his future endeavors".
As part of the transaction, VTR has also established an additional Chilean peso
denominated bank facility ("Tranche B") providing for up to approximately
ChP50.1 billion (equivalent to approximately US$85 million). Net proceeds from
Tranche B will be applied to refinance the existing Metropolis debt of
approximately $80 milllion that was not assumed by VTR in connection with the
merger. As a result, upon closing, VTR will have approximately $180 million in
bank debt financing.
About UnitedGlobalCom
UGC is a leading international provider of video, voice, and broadband Internet
services with operations in 16 countries, including 13 countries in Europe.
Based on the Company's operating statistics at December 31, 2004, UGC's
networks reached approximately 16.0 million homes passed and served over 11.6
million RGUs, including approximately 9.5 million video subscribers, 1.4
million broadband Internet subscribers, and 803,500 telephone subscribers.
Forward Looking Statements: Except for historical information contained herein,
this press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including statements
about the Company's VTR/Metropolis combination and indicative put options and
the anticipated timing of, and savings from, anticipated merger synergies.
These forward looking statements involve certain risks and uncertainties that
could cause actual results to differ materially from those expressed or implied
by these statements. These risks and uncertainties include when, if at all,
Cristalerias exercises its put option, and the value of its interest in VTR at
such time, our ability to timely and successfully eliminate redundant expenses,
the continued use by subscribers and potential subscribers of VTR's services,
changes in the technology and competition, our ability to achieve expected
operational efficiencies and economies of scale, our ability to generate
expected revenue and achieve assumed margins, completion of the proposed merger
between UGC and LMI, as well as other factors detailed from time to time in the
Company's filings with the Securities and Exchange Commission. These
forward-looking statements speak only as of the date of this release. The
Company expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any guidance and other forward-looking statement
contained herein to reflect any change in the Company's expectations with
regard thereto or any change in events, conditions or circumstances on which
any such statement is based.
Please visit http://www.unitedglobal.com/ for further information or
contact:
Richard S.L. Abbott Claire Appleby
Investor Relations - UGC Investor Relations - UGC Europe
(303) 220-6682 +44 20 7 838 2004
Email: Email:
Bert Holtkamp
Corporate Communications - UGC Europe
+ 31 (0) 20 778 9447
DATASOURCE: UnitedGlobalCom, Inc.
CONTACT: Richard S.L. Abbott, Investor Relations of UGC,
+1-303-220-6682, ; or Claire Appleby, Investor Relations of
UGC Europe, +44-20-7-838-2004, ; or Bert Holtkamp, Corporate
Communications of UGC Europe, + 31 (0) 20-778-9447,
Web site: http://www.unitedglobal.com/