General Cable to gear up for network growth

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The Independent Online
GENERAL Cable, one of the largest cable television companies in Britain, plans to raise up to pounds 350m in debt to help finance the expansion of television and telephone networks in Birmingham and Windsor.

The company, which in May postponed a pounds 500m flotation, says it will not come back to market before Easter at the earliest as it believes investors still do not grasp the full potential of the cable industry.

There has been speculation that General Cable and TeleWest, another large cable group, will both revive earlier plans to float on the London Stock Exchange around the end of the year.

Phillipe Galteau, General Cable's managing director, said: 'We are not going to give anything away. People realise that there is an opportunity in cable but they do not yet realise the value of it.'

General Cable, owned by Compagnie Generale des Eaux of France, also plans a separate pounds 250m debt financing exercise to fund its interest in the Yorkshire Cable Group, which is among the biggest franchises in the country, covering 875,000 homes and 50,000 businesses.

Yorkshire, a joint venture with Singapore Telecom, is in the early stages and the money may not be needed for another two years. However, networks in the Windsor and Birmingham areas are due for completion in 1997.

General Cable has a 45 per cent stake in the Birmingham cable venture and it owns 83 per cent of The Cable Corporation, which has the franchise in Windsor and other areas near London.

The company says that in spite of its funding requirement it is under no pressure from its French parent to float. Generale des Eaux, which has already provided the venture with about pounds 230m in debt and equity, is believed to be in no hurry to see its stake reduced.

Mr Galteau said that General Cable was also on the lookout for new acquisitions, either buying from existing franchise holders or bidding for new franchises to be advertised by the Independent Television Commission over the next 18 months. However, he said that the franchise would have to be contiguous to existing areas and have the right customer profile.

General Cable puts heavy emphasis on marketing to large businesses as it thinks the rest of the customer base then falls into place.

The company believes that its charges to residential customers are up to 15 per cent cheaper than BT and those for businesses around 4 per cent cheaper.