Tele Columbus Secures Capital Injection to Address Financial Worries

Germany’s second largest cable network operator Tele Columbus TC1 has got rid of its biggest financial worries thanks to a capital injection from its owners. An infrastructure fund from Morgan Stanley MS and United Internet WON Together they are investing a further 200 million euros in the company, which is best known for its “Pyur” brand. In return, the lenders want to extend a 462 million euro loan and a 650 million euro bond until 2028. Tele Columbus announced in Berlin on Saturday that discussions with representatives of the main creditors were well advanced. A company representative spoke of a “liberation strike”. Nothing was initially known about the loan conditions.

This means that the company, which is primarily represented in eastern Germany, can implement its ambitious growth goals. Morgan Stanley got involved two years ago with the understanding that Tele Columbus would invest more than two billion euros in expanding and upgrading the cable network within ten years. The takeover vehicle Kublai GmbH, which holds almost 95 percent of Tele Columbus AG, is owned 60 percent by Morgan Stanley and 40 percent by the previous major shareholder United Internet.

Time for refinancing was running short, even though the loan would not have been due for another year and the bond would not have been due until May 2025. But without fresh money, Tele Columbus would have fallen into a liquidity gap towards the end of the year, according to its own statements in the interim report. The company did not pay the coupon on the bond due at the beginning of November on time due to the ongoing negotiations. At the end of June, liquid assets were still at 34 million euros, but in the first half of the year alone they had fallen by 70 million. The two main shareholders had already contributed 100 million euros as a shareholder loan in the summer. Now 200 million in equity are added.

With its cable and fiber optic networks, Tele Columbus reaches more than three million households in Germany. In the first half of the year, sales fell slightly to 221.3 million euros, as did the operating result (Ebitda), which amounted to 86.8 (previous year: 93.8) million euros. However, interest and depreciation pushed Tele Columbus into the red again.