Fitch puts Tele Columbus watch positive

Fitch Ratings said it placed Tele Columbus AG’s long-term issuer default rating of B- and B senior secured debt rating on rating watch positive following a public takeover offer by UNA 422. Equity Management GmbH (BidCo) backed by Morgan Stanley Infrastructure Partners.

“We expect TC's funds from operations (FFO) gross leverage to fall below the upgrade threshold of 6x in 2021 following the completion of the takeover offer and a subsequent partial debt repayment with the proceeds from a capital increase of €475 million via a rights issue. The company guides for more than 1x of leverage reduction, but the exact amount of debt repayment is yet to be announced. The remaining proceeds will be spent on capex,” Fitch said in a press release.

Also, Fitch noted, “The current senior secured debt rating of B/RR3/65% should benefit not only from a potential IDR upgrade once leverage has been reduced but also from improved recovery prospects as a result of the total debt reduction.”

The agency said it plans to resolve the RWP following a successful takeover and right issue in line with the terms announced.

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