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KPNQwest completes acquisition of GTS's Ebone & Central Europe businesses and finalizes $462 million senior credit facility
March 18, 2002
HOOFDDORP, The Netherlands -- KPNQwest, the leadingpan-European data communications and hosting company, today announced that it has completed the acquisition of the Ebone and Central Europe businesses of Global TeleSystems, Inc and Global TeleSystems Europe B.V. (collectively "GTS"), pursuant to a share purchase agreement between GTS, GTS European Telecommunications Corp. and KPNQwest. As part of the acquisition, KPNQwest has issued approximately €211 million of 10% convertible bonds due 2012 to former GTS bondholders and assumed an approximate €435 million of net bank debt and capital lease obligations.The acquisition consolidates KPNQwest's position as the leading IP data communications provider in Europe. The new combined company will operate a 25,000 kilometre network with connection to 60 major European cities. In addition, 14 Metropolitan Area Networks (MANs) will be in service. The capital and operating synergies estimated at over €600 million, uniquely derived from the combination of these two companies, are expected to exceed the purchase price in just 4 years.To facilitate this transaction, KPNQwest has secured a new senior credit facility of €525 million with a consortium of financial institutions. With the new senior credit facility, the company believes that the newly combined entity is fully funded for all of its capital and operating cash needs.Of the €525 million, €50m may be used to purchase Nortel equipment, €225 million will be used to refinance the existing GTS debt and the remainder will be available for general corporate purposes.KPNQwest NV
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