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Viatel signs non-binding term sheet with Morgan Stanley and Co., Ahab Capital Management, CFSC Wayland Advisers, and Varde Partners
February 10, 2004
LONDON -- Viatel, the pan-European communications company, has signed a term sheet with four investors including Morgan Stanley to raise up to $60m. Although the term sheet is non-binding, negotiations are now underway with Morgan Stanley and Co. Incorporated, Ahab Capital Management, Inc., CFSC Wayland Advisers, Inc. and Varde Partners, Inc. to finalise the details of the proposed financing. It is anticipated that the transaction will be finalised in the second quarter of 2004.
The investment would take the form of senior secured convertible debt securities with 8% interest, payable in cash or in kind, and maturing in 2014. The conversion price is proposed to be contingent on the value of Viatel upon the occurrence of various specified liquidity events.
This announcement represents a significant step forward in the rebuilding of Viatel. Once closed, the deal will leave the company fully funded to deliver on its business plan. Viatel, a provider of communication services and operator of a pan-European network, is reengineering itself to serve mid sized firms in Europe*, a market estimated to grow by 21% to 23.5 billion Pounds Sterling by June 2005. Viatel will continue to serve carriers and internet service providers with wholesale services.
Lucy Woods, CEO of Viatel and a leading figure in the European telecoms industry said, "The term sheet signed today is a substantial vote of confidence in our business plan, our people and the opportunity we have before us."
"It will strengthen our ability to deliver a fresh approach to European businesses, providing them with the responsive data and internet services they deserve."
Michael Petrick, Managing Director at Morgan Stanley said, "This financing demonstrates our faith in Viatel and its management team and enables the company to pursue the significant opportunities that exist in the European Telecom market."
The announcement coincides with the launch of Viatel's new brand, and a marketing campaign designed to demonstrate Viatel's resolve to serve the untapped potential of the European mid sized business market. This campaign is deliberately fresh and bold, with a sense of humour that articulates Viatel's difference in the overcrowded and under served European business marketplace.
Leslie Goodman, Chairman of Viatel said, "We have worked very hard over the past year to restructure Viatel to meet the changed needs of today's market; this announcement is a demonstration of the progress we've made."
Viatel Holding (Bermuda) Ltd.
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