Cash-strapped ice cream man taps Credit Suisse for ‘hundreds and thousands’ to ease debts

2 Nov 2011

Romania Cable Systems (RCS&RDS) has reportedly entered into negotiations with a number of financial institutions to secure a loan worth EUR300 million (USD412.7 million) over a period of five years, which it intends to use to pay off a number of existing debts. According to Ziarul Financiar, one of the banks involved is Credit Suisse, which is prepared to lend RCS&RDS around EUR100 million of the total figure. The increasingly dominant RCS&RDS – which is owned by reclusive ice cream vendor-turned-telecoms tycoon Zoltan Teszari – has surged to pole position in the Romanian broadband market in recent years, toppling fixed line incumbent RomTelecom with its highly acquisitive strategy. However industry insiders fear that the cableco’s aggressive pricing strategy will have an adverse effect in the long-run, with the company’s profits already suffered in 2010. In July CommsUpdate reported that RCS&RDS announced undisclosed losses for 2010, after posting a net profit of nearly RON212 million (USD69.6 million) in 2009.

TeleGeography notes that this is not the first financial headache that Teszari has experienced this year. In July, RCS&RDS – along with Orange, Vodafone and Cosmote – was investigated by the Competition Council (CC) regarding possible abuses of significant market power within the mobile market. ZF indicated that, although such investigations by the CC can typically take up to two years, companies risk being fined anything between 0.5% and 10% of their annual turnovers if the investigation goes against them.

Romania, RCS&RDS (DIGI)