Liberty Global reorganising European business to improve credit appeal

Charlie Bracken, executive vice-president and co-chief financial officer of Liberty Global.

Liberty Global is to reorganise its European businesses, merging UPC Ireland with Virgin Media and UPC Netherlands with Ziggo to create a simpler debt structure.

Reuters reported that co-chief financial officer Charlie Bracken told an investor call yesterday that the new structure was “the culmination of a long journey” that would create a “more investor friendly capital structure”.

Dutch cable operator Ziggo, which Liberty Global acquired late last year, is to raise new debt amounting to €730 million to finance the merger of UPC Netherlands, while Virgin Media is to raise approximately £925 million (€1.2 billion) to finance the acquisition of the Irish operation. Separately, Liberty Global plans has launched an offer to raise up to €1.475 billion to exchange into new loans issued out of a Ziggo special purpose vehicle.

The overall effect of the changes will be to remove the relevant businesses from the UPC credit pool, enabling high-yield debt purchasers to avoid concentration limits, according to Reuters.

Liberty Global said the changes unveiled yesterday were related to finance rather than operations.

Liberty Global is already in the process of merging UPC Ireland with Virgin Media at an operational level. In November, Liberty’s EVP, European broadband operations, Diederik Karsten, sent an email to staff informing them that the two units would “establish more formal lines of communication” and that UPC Ireland managing director Magnus Ternsjö would become part of the Virgin Media executive committee and report to Virgin Media CEO Tom Mockridge.

Liberty Global announced last year that it was spinning off its Latin American and Caribbean businesses into a separate entity.