US-based company UPC is to sign the contract for the acquisition of cable operator Astral Telecom this week in a deal put at close to 420 million dollars (350 million euros), market sources say.
This is one of the largest private transactions on the Romanian market to date. Astral''s business was developed from scratch by a group of businessmen from Cluj, which includes Horia Ciorcila, chairman of board at Banca Transilvania. Astral brought an American investment fund into its business in 2000, whose money it spent on acquisitions and development.
UPC is the third leading player on the Romanian cable market. UGC Europe, which is held by US-based firm UnitedGlobalCom (UGC), will gradually take over all the shares. The buyer will also take over Astral''s debts.
A large part of the debts come from loans taken out in 2003 from the European Bank for Reconstruction and Development (EBRD) and the Dutch lender FMO for 7 million dollars and 5 million euros respectively. The money was used to expand Astral''s operations through a series of recent acquisitions on the market.
Astral''s current shareholders will start exiting the business gradually, with payment of the stake to take place in several stages, sources say.
According to the latest available information, Astral, which is currently locked in battle with RCS for the leading position on the cable TV market, is controlled by a number of investment funds - Cresciano Limited (34.35%), Dixon Investments Overseas Limited (25.69%), Bridgecom Holdings Limited (6.16%), Wordfield Limited (7.16%) and Dealgate Trading Limited (1.61%) - as well as private investors - Ghite Sorin Voicu (3.95%), Pop Baldi Nicolae Dan (3.95%), Urasi Bela (3.95%), Nicola Olimpiu Valentin (3.95%), Ciorcila Horia (4.29%), Goia Dorel (1.18%), Goia Ioan (2.1%), Oprea Mariana (1.61%) and Meciu Eugen (less than 0.1%). The American financial giant AIG owns around one quarter in Astral through Dixon Investments Overseas Limited.
Neither AIG officials nor any of the private investors were available for comment by the time this story went to press.
UGC Europe has enlisted US law firm Squire, Sanders & Dempsey and Romanian law firm Voicu & Filipescu as advisors in the acquisition of Astral Telecom. Consultants for the sellers were the law firms White & Case (US) and Despina Fruth Oprisan.
The Americans had been testing the ground for a takeover of Astral since last year, with the list of potential buyers primarily including European and American investment funds. The interest in this company comes from the large growth potential of the market, which should increase by about 4 times over the next four to five years.
The Competition Council will be notified of the deal, which will give the American company a strong position on the cable services market. Astral Telecom accounts for approximately 20-25% of the cable service market, and is already in talks for the takeover of a local operator. The American firm already has 10% of the market through UPC Romania and about 340,000 customers, according to the latest available data.
The cable market has been estimated at 320 million euros for this year, while the market for Internet services is worth more than 250 million euros, a survey by market research firm IDC reveals. adrian.mirsanu@zf.ro
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