PrimaCom creditors set to take control

6 Jan 2011

German cable operator PrimaCom, which filed for insolvency in June 2010 after its shareholders failed to reach an agreement with creditors regarding repayment of a EUR29.2 million loan (USD38.6 million), is now ready to be sold on to financial investors, Financial Times Deutschland reports, citing unnamed sources. In a debt-for-equity swap, PrimaCom’s lenders Alcentra Group, Avenue Capital Group, Tennenbaum Capital Partners and ING have agreed to initially take roughly equal stakes in the cableco, while reducing debt from the current level of EUR350 million, with a deal expected imminently, the sources revealed.

As previously reported by CommsUpdate, PrimaCom started insolvency proceedings for the non-operating PrimaCom Holding in June 2010. The following month the cableco said it had secured a EUR15 million credit line from a consortium of banks, allowing the operational business of the PrimaCom group to continue. In November 2010 PrimaCom’s creditors said that in exchange for writing down the cableco’s loans, they would acquire all of the shares in holding company Medfort Sarl, which bought PrimaCom from former parent PrimaCom AG in July 2010 after the company filed for insolvency. The lenders also agreed to provide EUR30 million through a second lien loan to allow the company to expand its business. PrimaCom’s core network is located in eastern Germany and serves around one million households.

Germany, PrimaCom