RCS&RDS, a company established and controlled by Romanian businessman Zoltan Teszari, has about $350 million in debt to roll over this year according to the data in a 2010 report of rating agency Standard & Poor’s. The company has not published updated information about its debt since.
Credit Suisse arranged a five-year syndicated loan of up to EUR300 million at the end of 2011, of which the operator has already drawn EUR200 million. BCR granted EUR100 million, CEC Bank – EUR25 million, and Credit Suisse contributed EUR75 million, at an interest rate above 5%, market sources say.
Will financing be more expensive for cable operators in Eastern Europe than those in the West?
“On balance, I think it is going to be somewhat more challenging for a company operating in the CEE to raise finance than for one in Western Europe because when investors are cautious about the overall markets, they tend to take a more conservative view toward the developing markets. That said, history shows that businesses like cable, and mobile telephony are very defensive and resilient and therefore, always seem to find capital someway, somehow,” Marisa Drew told ZF.
“As a result, I think the financing will be there for RCS but it will likely be somewhat more costly without an improvement in the markets as investors express their concerns about the implications of the euro zone crisis in the form of higher pricing.”
So if the cost of RCS&RDS’s refinancing will be higher, it will be because of the context, not because of its results?
“That is correct, if you look where the sovereign or the PTT [telecom i.e.] is trading, investors will benchmark their pricing as a starting point against these credits and then they apply a discount (or spread) to these levels for a corporate credit like RCS&RDS.”
RCS&RDS is a cable TV, Internet, landline and mobile phone operator with yearly revenue of more than EUR400 million in Romania alone and also has operations in Hungary, Slovakia, Czech Republic, Croatia, Serbia, Italy and Spain.
(English version by Loredana Fratila-Cristescu)