Tiscali Reports H1, Debt Facility

Tiscali announces €150M debt financing from Silver Point and reports Q2 revenues of €178M, up 9% year on year

August 8, 2005

3 Min Read

CAGLIARI, Italy -- The Tiscali Group announced today that it has completed a EUR 150 million seniorsecured credit facility. The facility was structured and provided by Silver Point Financeand its affiliates. Silver Point Finance, structures and provides custom financing forlarge and middle market companies across all industries.

The facility comprises two tranches, with a duration of 3 years after the initial drawing,at a rate of EURIBOR + 600bps. The first EUR 50 million tranche is expected to beadvanced in August 2005. The second EUR 100 million tranche will be made availablein September 2006, subject to customary terms and conditions.

Proceeds of the first and second tranches will be used for general corporate purposesand to refinance the 4.25% Equity Linked Bonds due September 2006, respectively.

"This credit facility enables us to execute the business plan in our core markets asannounced to the market in April of this year. These plans are focused on profitablegrowth of our customer base by investing in ULL networks and offering high qualityservices at a fair price to our customers. We are pleased to have found a partner inSilver Point, who understands the growth potential in our business." said RuudHuisman, Chief Executive Officer of Tiscali S.p.A.

"After repayment of the bonds due July 7th 2005, we have achieved our objective offinancing our business plan. This facility is structured in such a way that it enables us tomeet our commitments while at the same time providing operating flexibility" saidMassimo Cristofori, Chief Financial Officer of Tiscali S.p.A.UBS Investment Bank acted as exclusive financial adviser to the Company in thistransaction.

2Q2005 results highlights

Tiscali preliminary* results for the quarter ending June 30th 2005 are largely in line withthe business plan announced to the market.

ADSL customers grew by approximately 180,000 units in the quarter, bringing totalADSL customers to approximately 1.38 million (+15% on 31 March ‘05), of which over250,000 unbundled.

Revenues were approximately EUR 178 million, with a 9% growth versus the 2ndquarter of 2004, on a comparable basis**, entirely driven by ADSL services (+53% on2Q 2004).

Gross margin was approximately EUR 89 million (50% of revenues), a strongimprovement versus the second quarter of 2004, when it accounted for 47% ofrevenues, showing that the strategy of focusing on more profitable unbundled ADSLcustomers is paying off in terms of profitability.

EBITDA in the quarter was approximately EUR 19 million (11% of revenues), versusEUR 18.1 million in 2nd quarter 2004 (11% of revenues). The EBITDA result in thequarter was impacted by marketing investments to push the growth of ADSL customersand to launch the new VoIP bundled products.

As already announced to the market, and in line with CONSOB regulation, Tiscali willreport IFRS-compliant first half results by end of September 2005.

(*) Data reported under Italian GAAP. They are therefore subject to possible changes followingthe application of IAS/IFRS accounting principles when reporting 1st half 2005 results

(**)The information and the percentage change versus the previous quarters are presentedconsidering only the countries included in the 2005-2007 business plan (Italy, Germany, theNetherlands, United Kingdom and Czech Republic).


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