Tiscali 2003 Annual Report Download - page 32

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33
Cable&Wireless France
With the aim of consolidating its position in business services on the French market, in July 2003, Tiscali completed the acqui-
sition of Cable & Wireless in France (annual sales of EUR 35 million), through its French subsidiary Liberty Surf Group S.A..
The operation will increase Tiscali’s business services revenues in France to EUR 50 million. The acquisition cost of EUR 5.6
million will be paid in two tranches, in cash. The first tranche was paid in the third quarter of 2003.
npower
In September 2003 Tiscali acquired the voice business of npower via its subsidiary Tiscali UK. The cost of the operation was
around EUR 10.2 million, paid in cash in 2003. The migration of npower’s 200,000 voice customers was completed in mid-
November. The acquisition contributed to strengthening Tiscali’s position on the UK telephony market, where offering voice servi-
ces is of strategic importance. Tiscali will also be able to offer its new customers a wide range of voice services, as well as dial-
up and broadband connections. The acquisition is part of the Group’s strategy to strengthen its presence on the
UK market.
Bond issues and buyback operations
Equity-linked bonds
At the end of September 2003, Tiscali issued a EUR 209.5 million guaranteed equity-linked bond maturing on 26 September
2006. The bonds were issued by Luxembourg subsidiary Tiscali Finance S.A. (a Company created for the purpose of issuing bonds)
and backed by Tiscali S.p.A.. The redemption price was set at EUR 7.57, which offered a premium of 32% on the price of Tiscali
shares at issue. The coupon was set at 4.25%.
All of the bonds are to be redeemed at maturity, at a price linked to that of Tiscali ordinary shares. From September 2004, howe-
ver, bond holders may opt for early redemption (at a price linked to that of Tiscali ordinary shares). The bonds are redeemable
in cash (whether redeemed early or at maturity) or Tiscali ordinary shares, at the discretion of Tiscali Finance, to the equivalent
of the redemption price indicated in Condition 6 of the issue regulations (please see the notes to the accounts for more infor-
mation). The issue has enabled Tiscali to refinance part of its existing debt under better conditions.
Public offer to buy back bonds maturing in July 2004
On 17 November 2003, Tiscali announced plans to launch a buyback on all bonds issued in July 2002 by subsidiary Tiscali
Finance S.A. and maturing in July 2004, worth a total of EUR 150 million. On 28 November CONSOB approved the publica-
tion of the offer prospectus. The offer period was 1-22 December 2003. This operation formed part of the process of restruc-
turing Tiscali Group debt, by refinancing a proportion of it to improve the cost and maturity profile. When the offer closed on 22
December 2003, take-up had reached 46.47% of the relevant bonds, worth a total of EUR 69.698 million. Added to the face
value of almost EUR 69.7 million were interest payments of around EUR 2.1 million (EUR 29.78484 per EUR 1,000 of the
face value), bringing the total payment to EUR 71.8 million.