HTCC to acquire 95.7% stake in Memorex Telex Communications.

INTERNET BUSINESS NEWS-(C)1995-2007 M2 COMMUNICATIONS LTD 

Hungarian Telephone and Cable Corp (HTCC) (AMEX:HTC), an alternative and fixed line telecommunications and broadband Internet Services Provider in the Republic of Hungary, announced on Thursday (20 December) that the company has reached an agreement to purchase 95.7% of the outstanding equity in Memorex Telex Communications AG, an alternative infrastructure provider in Central and Eastern Europe.

The purchase price for the 95.7% equity interest was EUR90.5m, which includes the assumption of EUR60.2m in debt and a cash payment in the amount of USD30.3m, to the selling shareholders of Memorex.

HTCC said that the company will refinance a substantial portion of Memorex's EUR60.2m debt at closing.

HTCC is expected to fund the acquisition and the refinancing of the assumed Memorex debt with a subordinated bridge loan facility arranged by Merrill Lynch and BNP Paribas. This facility will rank pari passu with HTCC's existing EUR142m 10.75% senior notes due 2012 and HTCC's existing EUR200m floating rate senior notes due 2013.

The company plans to subsequently replace the bridge loan facility with longer term financing.

The transaction is expected to close in February 2008, after customary closing conditions.

HTCC said that, after closing of the acquisition, the company intends to buy out the minority shareholders in Memorex in accordance with Austrian law, resulting in HTCC's ownership of 100% of the equity.

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