Euskaltel‘s (BME:EKT) acquisition of R Cable is reportedly set to close on 30 October, when both boards are due to approve the €1.12bn (US$1.27bn) transaction.
Following approval, Euskaltel will take out a €850m (US$953m) loan led by Santander, BBVA, Caixabank
Euskaltel recently took out another €470m (US$527m) loan, aimed at refinancing debt, paying extraordinary dividends and bonuses related to its end of June IPO, which valued the company at €1.2bn (US$1.34bn).
The two loans will bring Euskaltel’s total debt to €1.3bn (US$1.45bn). The company last year generated a cashflow of €113.6m (US$127.6m) and profits of €50m (US$56.1m), according to a source cited by the newswire.
Euskaltel will reportedly use €600m of the loan as a cash payment for R Cable, paying another €250m in newly issued shares worth €10.18 apiece.
Following the transaction, Euskaltel will be 17% owned by current R Cable shareholders CVC (12%) and Abanca (5%). Leading shareholder Kutxabank, which currently owns 30.1% of Euskaltel, will own 25% of the combined group.
Together, the two groups will have a 725,000 km fibre network, 715,000 customers, earnings of €570m and EBITDA of €265m. Each company will retain its own brand.
Spokespeople for Euskaltel and R Cable were not immediately available for comment.