Fitch affirms Tiscali

Fitch Ratings said it affirmed Tiscali SpA's ratings at senior unsecured CCC+ with stable outlook and short-term B following the announcement that the company has obtained a three-year €150 million senior secured financing from Silver Point Finance.

The rating on Tiscali Finance SA's €209.5 million guaranteed equity-linked bonds due in September 2006 has also been affirmed at CCC+, the agency said.

"The announced senior secured financing is another step towards securing sufficient resources to support Tiscali's business plan. Along with the additional money raised from the recently announced disposals of 60,000 ADSL subscribers to KPN and the sale of Tiscali International Networks to Telecom Italia, this new financing is, on balance, good news for Tiscali's bondholders," said Stefano Podesta, director in Fitch's European Leveraged Finance team.

"The focus is now on management's ability to execute their strategy successfully. However, financial flexibility remains quite limited. Tiscali will have to start generating a substantial amount of cash flow to grow their business in line with market trends. This may prove challenging in the absence of additional capital to support growth."

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