Patrick Drahi is raising capital aboard, part of which will be used to restructure the debt of Hot Telecommunication Systems Ltd. (TASE: HOT), which he controls. On Friday, Drahi's private company Altice Group raised $1.1 billion in debt in London from international investors, led by Goldman Sachs, Morgan Stanley, and HSBC. The bonds will be listed on the Luxembourg Bourse.
In a statement, Altice said that the offering was over-subscribed by more than $6 billion, which indicates the wish of many international institutions to share in the exposure to the Israeli telecommunications market through Hot. Hot previously reported that Altice's debt offering would include a lien on its rights in Hot.
Altice issued three bond series, the principals of which will be paid at the end of the period (bullet). The first series, totaling $450 million, is for seven years, bearing an annual interest rate of 7.9%; the second series, totaling $200 million, is for seven years, bearing an annual interest rate of 8%; and the third series, totaling $400 million, is for eight years, bearing an annual interest rate of 9.9%.
In addition to Altice, Drahi owns 69.2% of Hot through Cool Holdings Ltd. Hot will soon become wholly-owned by Drahi, after its minority shareholders agreed to sell their shares at a company value of NIS 3.06 billion.
Altice will provide financing
Last week, Hot announced a restructuring of its debt. The company currently has financing from Bank Hapoalim (TASE: POLI) and Bank Leumi (TASE: LUMI). After HOT becomes a private company, Altice will provide it with financing. The new financing will include the issue of a bond by Hot to Altice with a par value of NIS 1.9 billion and bearing an annual interest rate of 6.3% (if there is a violation of commitments, the interest rate will be increased by 2.75% a year).
The principal will be repaid in a single installment in 2019, and the interest will be paid in semiannual installments from 2013. Altice will have a lien on assets of Hot and its subsidiaries as collateral for the commitments. Altice will also provide Hot with a NIS 320 million credit line.
Hot chairwoman Stella Handler, who participating in the debt offering, said that this was a vote of confidence in the Israeli market, and in Hot in particular. "By participating in the offering, foreign investors expressed their appreciation of the progress and greater sophistication of the Israeli telecom market. As part of its strategy, Hot will continue to invest in upgrading its infrastructure to fiber optics, broadband Internet, and in content," she said.
Midroog Ltd. today reaffirmed Hot's A1 debt rating with a "Stable" outlook.
Published by Globes [online], Israel business news - www.globes-online.com - on December 9, 2012
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