Cable Satisfaction agrees to sell Cabovisao unit

By Caroline Salls

Pittsburgh, June 2 - Cable Satisfaction International Inc.'s interim receiver, RSM Richter Inc., said the company has entered into an agreement with Cogeco Cable Inc. and Catalyst Fund LP I to sell its wholly owned indirect subsidiary Cabovisao - Televisao por Cabo, SA, according to a Friday news release.

The purchase price is based on a Cabovisao enterprise value of €464.9 million, from which Cabovisao's senior secured debt and other Cabovisao obligations, including tax liabilities, trade payables and fees and expenses, will be deducted.

The senior secured debt will be purchased or repaid in connection with the sale transaction.

Cogeco Cable will assume a €20 million normalized working capital deficiency, and the purchase price will be adjusted after closing to reflect any variation from the normalized working capital deficiency at closing.

The transaction is subject to an order of the Superior Court of Quebec on the implementation of Cable Satisfaction's second amended and restated plan of arrangement and reorganization under the Companies' Creditors Arrangement Act, and to other customary conditions.

Cable Satisfaction will distribute the net proceeds from the Cabovisao sale, less debtor-in-possession loans made in connection with the plan and other fees and expenses, to Cable Satisfactions rights and common shareholders.

According to the release, the rights and common shares will have been distributed to creditors under the amended plan.

As previously announced, the plan provides for no distribution to existing shareholders, and no distributions of the proceeds from the sale will be made to existing shareholders.

Cable Satisfaction is a Montreal-based provider of broadband services.

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