Acquisition of Cabovisão – Televisão por Cabo, S.A.
On June 2, 2006, the Company’s subsidiary, Cogeco Cable Inc. entered into an agreement with Cable Satisfaction International Inc. (“CSII”), Catalyst Fund Limited Partnership I (“Catalyst”) and Cabovisão – Televisão por Cabo, S.A. (“Cabovisão”), to purchase, at a cost of €464.9 million, all the shares of the second largest cable operator in Portugal, an indirect wholly-owned subsidiary of CSII. The price includes the purchase of senior debt and reimbursement of certain other Cabovisão liabilities. The final purchase price will be determined following completion of a post-closing working capital adjustment. The Company is assuming a €20 million working capital deficiency. The transaction, which was approved by the Superior Court of Quebec on July 4, 2006, is still subject to the fulfilment of certain conditions of closing, including the implementation of the plan of arrangement previously approved by the court in March 2004, as amended. The Company will finance the acquisition of Cabovisão through an underwritten credit facility of $900 million over five years committed by a major Canadian Chartered Bank.