By Joon Knapen
> > Of DOW JONES NEWSWIRES
> >
> >
> >
> > FRANKFURT (Dow Jones)--Primacom AG (PCAGY) has reached an agreement
> > to sell its Dutch Multikabel unit to a private equity firm, but still
> > needs approval from some of its lenders before it can close the deal,
> > people familiar with the situation have told Dow Jones Newswires.
> >
> > The preliminary agreement on the Multikabel sale for a price at or
> > above the EUR530 million asking price was reached in early April, one
> > person said, and comes little over a month after Primacom failed to
> > sell the unit to Swedish buyout firm EQT.
> >
> > German cable television operator Primacom has made the sale of
> > Multikabel, based at Alkmaar in the Netherlands, a key element of its
> > financial restructuring. Primacom is unprofitable and needs cash to
> > cut estimated debt of EUR1 billion.
> >
> > The people declined to identify the name of the buyer, with one
> > person saying it is " a large private equity fund with good cable
> > know-how." Primacom started exclusive talks with this private equity
> > firm on Feb. 18, just days after talks with EQT collapsed, the people
> > said.
> >
> > Multikabel, which operates a network north of Amsterdam, generates
> > between EUR75 million and EUR80 million in annual sales. It has an
> > earnings before interest, taxes, depreciation and amortization, or
> > EBITDA, margin of around 60% of sales, the person said.
> >
> > People familiar with the disposal plan have said Primacom's price tag
> > for the unit is at least EUR530 million.
> >
> > Primacom, which had 1.4 million subscribers in Germany and the
> > Netherlands at the end of 2003 and offers TV and high-speed Internet,
> > announced in late 2004 a controversial plan to sell Multikabel.
> >
> > The company is in a legal battle with a group of lenders, including
> > Apollo Management LP (AM.XX), JP Morgan Chase & Co. (JPM) and
> > Blackstone Group (BGP.XX). These so-called second-secured lenders are
> > owed around EUR500 million, but rank behind Primacom's senior lenders
> > - a syndicate of 16 banks, including Bank of America Corp. (BAC) and
> > Dutch ING Groep NV (ING) - when it comes to being repaid.
> >
> > The senior lenders agreed to a sale of Multikabel. In January, the
> > second secured lenders won an injunction that prevents a sale without
> > their approval. The injunction was reaffirmed by a U.K. court at the
> > beginning of April.
> >
> > Primacom is still waiting on approval from the second-secured lenders
> > for the Multikabel sale, the people said. Earlier this week, the
> > senior and second secured lenders held " intensive talks" in the
> > Netherlands to come to an agreement about the financial restructuring
> > of Primacom, and another meeting has been scheduled to take place
> > soon, one person familiar with the matter said.
> >
> > Primacom executives weren't present at the meeting. A spokesman for
> > Primacom said the company doesn't comment " on ongoing negotiations."
> >
> > The second secured lenders have been at loggerheads with management
> > ever since their bid to take over the company was blocked by
> > shareholders in June 2004. The largest shareholder in Primacom is
> > John Malone's Liberty Media International Inc. (LBTYA), which has a
> > 27% stake.
> >
> > Spokespeople for Apollo and JPMorgan declined to comment on the sale
> > of Multikabel.
> >
> > One person close to the second secured lenders said " no new proposal
> > has been submitted to them by Primacom" on the financial
> > restructuring.
> >
> > Primacom shares have posted strong gains since the dismissal of the
> > bid from Apollo and JP Morgan. They traded as low as EUR0.26 in
> > spring 2004 and have been highly volatile. At 1126 GMT, the stock was
> > traded up EUR0.04, or 1%, at EUR4.20.
> >
> > Company Web site: www.primacom.de
> >
> > -By Joon Knapen, Dow Jones Newswires; +49-69-29725509;
> > joon.knapen@dowjones.com
> >
> > (END) Dow Jones Newswires
> >
> > April 22, 2005 07:37 ET (11:37 GMT)
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