Nynex CableComms set to raise £400m in offering

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The Independent Online
Nynex CableComms, the second largest UK cable television company, is to raise £400m through an international share offering, valuing the company at about £1.3bn. The company, owned by Nynex of the US, will use the proceeds to help fund its £2bn investment programme.

Nynex controls franchises covering 2.7 million homes, including a cluster of 10 franchises covering 1.75 million homes around Manchester. About one quarter of Nynex's network has been built so far with £515m spent by the end of 1994.

Nynex is the latest in a queue of cable companies coming to the market following the debut of Telewest in November. In March, General Cable said it would raise up to £230m, valuing it at £557m to £646m. Bell Cablemedia is also to seek a London listing later this year.

Eugene Connell, chief executive and president of Nynex CableComms, said: "There is a very strong interest in this segment and we have an enormous amount to offer the investment community." Mr Connell said that the cable sector is set for a further shakeout, with the number of players falling to about six by the end of the decade compared with 15. Nynex is interested in acquiring further franchises where they expand the boundaries of its empire. It has also bid for the new "local delivery" franchise in Northern Ireland, in which the operators will be able to use cable and radio to build the network.

Nynex has 122,000 cable television subscribers and has installed more than 100,000 telephone lines. Revenues last year were £41m, split roughly evenly between the services. The level of churn - the proportion of people leaving the networks - is 31 per cent on the cable television service and about 16 per cent on telephony. Mr Connell said that the churn rate is significantly better than the industry as a whole.

Nynex recently launched a marketing offensive undercutting BT's basic prices by up to 25 per cent. The company also offers free off-peak local calls within its network to customers taking a premium movie channel. Nynex believes that the ability to offer packages of television and telephony will become a key factor for success.

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