German cableco KDG is on track to reduce debt faster than, CEO Adrian von Hammerstein has told the Financial Times. At the same time, it is looking to make two domestic acquisitions, which could include Kabel BW and Unitymedia, he said.
Cash flow, he…
German cableco KDG is on track to reduce debt faster than, CEO Adrian von Hammerstein has told the Financial Times. At the same time, it is looking to make two domestic acquisitions, which could include Kabel BW and Unitymedia, he said.
Cash flow, he said, is high enough to start looking at shareholder returns, faster debt reduction and investment, now that superfast broadband is being sold to about one eighth of the company’s 8.9 million cable customers.
The aim, he said, is to reduce current net debt levels of E2.86bn – or 4.1 times EBITDA to “3.5 to 4 times” EBITDA.
The company could go further, he could continue, by adjusting that target even further down to 3 to 3.5 times and “deleveraging more strongly,” he said.
Next on the menu after reducing debt levels would be playing a role in consolidation on the German market, where Kabel BW was set to go on the block, continued von Hammerstein. However, any acquisitions would need the approval of the cartel office, he warned, although his view was that KDG competes as a converged telco with Deutsche Telekom’s broadband network rather than other regional operators.
While allowing that Unitymedia could one day be merged into KDG, which still counts on strong backing from Providence, he qualified this scenario as speculation – adding however that a single national cable operator would be good for the market.
Some analysts, speaking to the FT, said von Hammerstein was looking to demonstrate to possible targets that there were plenty of other uses for company cash.
Last week, Providence placed 15 million shares in KDG to institutional investors via its vehicle Cable Holding, reducing its shareholding from 60.37% to some 45%.
