CCC Blue Telecom (the former ConySat), Romania''s third-largest cable operator, with a market share of 6%, will float its stock on the Bucharest Stock Exchange through an initial public offering (IPO).
The company is over 95% held by businessman Catalin Chelu, of Galati, one of the major individual investors on the Stock Exchange.
The value of the offering is likely to range between 10-15 million euros. The price will be set, as in the case of Flamingo, depending on the market''s demand for stock. However, the cable company and brokerage representatives did not mention the limits that will apply to investors'' orders.
The company will run a public stock sale offering accounting for 25% of the share capital after this operation ends. "Around 20 million shares will be put up for sale, each with a face value of one RON. We hope to get the approval of the National Securities Commission during February or in March at the latest and soon after we will get the stock onto the Bucharest Stock Exchange," stated Catalin Chelu, the majority stakeholder, owning 96.64% of the operator''s stock.
He added that he might increase the share of stock put up for sale to 40% so as to secure a solid stock liquidity. After floatation, the share capital of the company will be raised from 59.6 million RON to 80 million RON. The last deal on the cable market was the takeover of Astral by the American company UPC, for a price exceeding 400 million dollars. The deal took place at a price of around 400 dollars/subscriber (300 euros/subscriber).
CCC Blue Telecom has 180,000 subscribers for its cable TV service, of whom 3,000 also have access to the Internet. The company started providing Internet access services last autumn, launching a network modernisation programme. Considering current technological conditions, by the end of 2007 CCC Blue Telecom will provide Internet access services in 80% of the networks it owns, according to the company''s representatives.
At a price of 330 euros/subscriber, the value of CCC Blue is estimated at around 60 million euros. The company has, however, a much lower implementation of optical fibre networks and a higher dispersion of cable networks, which are more expensive to maintain.
The company levies lower tariffs than its rivals in the cities where it operates, this way generating lower revenues per subscriber in the respective areas.
However, beside cable activities, the company also has placements on the stock exchange in the main listed stock, worth around 3 million euros, as well as owning a number of real estate properties.
Chelu''s argument supporting investments on the cable market is the penetration degree of cable TV, about 45% of total households countrywide, a degree standing at about 20% in rural areas, which are being targeted in the company''s expansion plans.
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