Gimv, Belgian risk capital provider has sold its shareholding in Telenet, the Belgian communications company, to Callahan Associates, the global development and operations company. Total transaction value was e391 million. Gimv will realise an estimated capital gain of e187 million from the investment.
The transaction is for the sale of 100 per cent of the Gimv share in Telenet and comprises, cash, vendor notes and shares. With the sale, Gimv’s new asset value will rise by e95 million to e1660 million or e71.6 per share.
From the sale of its shareholding, Gimv will create a capital gain of e282 million, of which e187 million will be taken into account in the 2001 figures.
The contract with Callahan comprises three parts. In the first part, Gimv will receive a cash sum of e109 million. In addition, the company will receive vendor notes for a sum of e195 million. Gimv will apply only 80 per cent (e156 million) as a base when specifying the capital gain. The insertion in the net asset value will depend on the external valuation of that moment. Today the notes are valued at 84 per cent.
Finally, Gimv will receive 12 per cent of the shares of the new parent company of Telenet, with a counter value of e118 million. However, these shares will be booked in Gimv’s balance sheet at e31 million, relatively the same value as that of the original investment. The capital gain on these shares will therefore only be expressed in the net asset value.
Telenet was established as a start-up in 1996. As well as Gimv, investors in the company include two groups of cable operators and a financial consortium including Belgian bank KVC and Denver-based US West International.
The current shareholders now own 45.8 per cent of the company, with Callahan Associates owning 54.2 per cent.
Fons van Dyck of Telenet said that the company was very pleased to have Callahan Associates on board as a Telenet shareholder and operating partner.
Andrew Sukawaty, president and chief executive officer of Callahan Associates, said: “We are investing in Flanders future. This agreement accelerates Flanders’ leap forward in high speed Internet, communications and digital entertainment services.
It will bring the region great infrastructural advantages over other parts of the European community.”
Telenet provides telephony, Internet and multimedia services to the Flanders region of Belgium, which represents nearly six million inhabitants, or 58 per cent of the country’s population. Telenet provides these services on an exclusive basis over the CATV networks of Flemish cable companies, which pass 2.5 million homes and have 2.2 million subscribers.