Basque-based cableco Euskaltel is launching a share issue to help pay for its acquisition of rival R Cable, according to Reuters.
As previously reported by CommsUpdate, in July 2015 Euskaltel agreed an offer for R Cable in a deal which was said to have given the latter company an enterprise value of around EUR1.2 billion (USD1.27 billion). Now, Euskaltel has revealed plans to issue more than 25.3 million new shares as part of a planned capital increase, with the funds raised from this to be used in combination with new loans and existing cash to finance the R Cable purchase.
It is understood that underwriters Citigroup and UBS are currently sounding out demand among institutional investors, with the share sale expected to be completed in the coming days. Meanwhile, Corporacion Financiera Alba, a financial holding group belonging to Spanish investment group March, along with Galician-based lender Abanca and some Euskaltel executives, have already agreed to invest EUR132.5 million between them in the share issue. The new shares issued by Euskaltel will begin trading on 26 November.