Liberty Global to Acquire Unitymedia WELT ONLINE
Liberty Global, Inc. ("Liberty Global,” "LGI,” or the "Company”) (NASDAQ: LBTYA, LBTYB and LBTYK) today announced that it has entered into a share purchase agreement with Unity Media S.C.A. to acquire all of the issued and outstanding capital stock of Unitymedia GmbH ("Unitymedia”), Germany’s second largest cable operator.
Unitymedia is the largest cable television operator in the German federal states of North Rhine-Westphalia and Hesse, which are among the most prosperous and densely populated regions in Germany and Europe. The cable footprint, passing approximately 8.8 million homes, covers ten of the twenty largest cities in Germany, including Cologne, Dusseldorf, and Frankfurt. At September 30, 2009, Unitymedia reported approximately 6.4 million RGUs (as defined by Unitymedia), including 4.5 million analog and digital basic cable subscribers and 1.9 million new service RGUs (digital TV Pay, retail broadband internet, wholesale MMA internet, and telephony).
Liberty Global will acquire 100% of the shares of Unitymedia for an equity purchase price of €2.0 billion ($3.0 billion), from its parent, which is owned by a group of shareholders led by BC Partners and Apollo. Together with Unitymedia’s reported net debt at September 30, 2009 of approximately €1.5 billion ($2.2 billion), the total consideration is approximately €3.5 billion ($5.2 billion), excluding transaction costs, and represents a purchase price multiple of approximately 7.4 times our estimate of Unitymedia’s 2010 Adjusted EBITDA under IFRS accounting standards. Taking into consideration our estimate of the annual impact of synergies that may be realized following the full integration of the acquisition, the effective purchase price multiple would be approximately 6.6 times 2010 Adjusted EBITDA. Completion of the transaction is expected to occur in the first half of 2010 and is subject to regulatory approval.
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Who will finance our debt? Who has confidence in the fiscal responsibility of the US congress? Will our dollar collapse, and if it does, what will ...
What were the advantages of debt financing in the early 1990's?
Please help - this is for school!
Fairly low interest rates. Debt financing was cheaper than the cost of capital. Basically, it was cheaper to borrow money than to give an investor an ownership stake in your profits.
What are the advantages and disadvantages of debt financing.?
The primary advantage of debt financing is that it allows the founders to retain ownership and control of the company. In contrast to equity financing, the entrepreneurs are able to make key strategic decisions and also to keep and reinvest more company profits. Another advantage of debt financing is that it provides small business owners with a greater degree of financial freedom than equity financing. Debt obligations are limited to the loan repayment period, after which the lender has no further claim on the business, whereas equity investors' claim does not end until their stock is sold. Furthermore, a debt that is paid on time can enhance a small business's credit rating and make it easier to obtain various types of financing in the future. Debt financing is also easy to administer, as it generally lacks the complex reporting requirements that accompany some forms of equity financing. Finally, debt financing tends to be less expensive for small businesses over the long term, though more expensive over the short term, than equity financing.
The main disadvantage of debt financing is that it requires a small business to make regular monthly payments of principal and interest. Very young companies often experience shortages in cash flow that may make such regular payments difficult. Most lenders provide severe penalties for late or missed payments, which may include charging late fees, taking possession of collateral, or calling the loan due early. Failure to make payments on a loan, even temporarily, can adversely affect a small business's credit rating and its ability to obtain future financing. Another disadvantage associated with debt financing is that its availability is often limited to established businesses. Since lenders primarily seek security for their funds, it can be difficult for unproven businesses to obtain loans. Finally, the amount of money small businesses may be able to obtain via debt financing is likely to be limited, so they may need to use other sources of financing as well.
Which of the following is an advantage of equity financing over debt financing?
Which of the following is an advantage of equity financing over debt financing?
A. The original partners can maintain total control of the company.
B. Equity financing provides necessary capital more quickly than a loan.
C. It's possible to raise more money than a loan can usually provide.
D. Debt financing is reserved for large corporations with a history of high profits.
A-False
B-False
C-True
D-False
"C" is right one.
A becomes very difficult, B is usually not true, and D is not an advantage. C is also expressed as "it's possible" so its definately true that it is at least possible.
what is the advantage of debt financing over equity financing?
please answer properly and with straight forward facts.Thanks.
Equity financing, if you can do it, is usually better long term. It has less risk (as in things don't get repossessed if you don't repay the debt), and means that you don't have the added expense of interest on debt. That said, there are some situations where equity financing is inappropriate or impossible.
Provided you are using debt financing to purchase growth assets (like property or good quality shares that are likely to increase in value over time,) negating the effects of the interest that you're paying, then debt financing is good for the following reasons.
Most of us don't have a spare hundred or two hundred thousand dollars just sitting there when we want to buy a house. Because of the high cost of property, using debt to finance a purchase allows you to make the purchase in the first place, and also allows you to capitalise on market drops. For example, if a house is worth $100 000, but then the value drops to $90 000, you can capitalise on this by borrowing money (when you don't have that money in your pocket) at a time which suits you, because you end up paying less for the house, borrowing less than you would have if the property was purchased at the top of the market. The same goes for shares.
If you were borrowing to expand a business, this also means that you can borrow at a good time, (perhaps when rates are down, lowering your interest over the loan) to put in more equipment, or more staff, or move to a better location, which over time will pay you back in better returns.
Depending on what you buy, and the laws where you live, there can also be a tax deduction on the interest you pay on the loan. Called negative gearing, this can help your financial situation if you have a heavy tax burden.
So basically, the advantages debt financing have over equity financing are that
(1) you have the option of buying when you don't have the available cash.
(2) you have the flexibility of buying at a time which allows you to get better value for money.
(3) you may receive a tax break from doing so, which you would not recieve if you were using your own equity to finance the purchase.
As you can see, there are not a lot of benefits from using debt to finance a purchase. If you finance a consumer purchase that goes down in value, like a car, you will not get the return over time, making it inappropriate to borrow money for this. But wisely used, debt can be a useful tool that allows you to capitalise on the volatility of different markets. You just have to use it wisely and do the numbers to make sure you don't overcommit yourself to debt, because that's when the whole project collapses.
Best wishes
possess as much information as you could maybe is one of the options,however it is quite time consuming,here http://www.DebtFreetips.info/debt-free.htm is the resource i have ever had good experience.
what are the advantage and disadvantage of debt financing and equity financing?
My company has been talking to a consultant and I need to know what the advantages and disadvantages are before I make any moves!
http://www.womanowned.com/Growing/Funding/Financing.aspx
Type this phrase into the www.google.com search bar:
Debt financing vs. Equity financing
There are plenty of sites addressing this issue and should help in your education.
Good luck!!
Debt Financing -
Advantages: interest payments are tax deductible, there is no dilution (decrease in ownership) to existing equity holders.
Disadvantages: the debt holder has FIRST CALL on all assets of the Company (in advance of equity holders) in case of a liquidation. Also, there are many covenants associated with debt instruments that may impact a company's freedom of action. Of course, debt instruments usually have current payments required - which means if you don't have current net operating income this can cause difficulties.
Equity Financing:
Advantages: No current payments due; No preferential rights on assets of the Company.
Disadvantages: Dilutes ownership of current equity holders; may result in control loss issues.
Of course, this presumes you use COMMON equity financing - if a Preferred Equity structure is used it can often mimic some of the characteristics of debt financing without the advantage of tax deductibility.
what are the advantages and disavtanged of debt finance?
Debt usually involves loan and debenture. The advantages of debt finance from the view point of company are:
1It does not dilute the shareholders right means it does not give right to the lender to involve in business management.
2 Interest of loan is usually tax deductible.
DISADVANTAGES ARE
1 Interest of loan has to pay whether profit or loss has been made in a year.
2 The riskier the loan is, the higher the interest rate will be.
3 Most lenders will require small business loans to be co-signed or guaranteed by the owner of the business.
Debt and Equity Financing?
What are the advantages and disadvantages of forgoing debt financing and equity financing?
The only time debt financing makes sense is if you have a mature business that has a proven ability to return more than you are paying in debt. All other business situations are best financed with equity because if you are just getting started you can ask investors to buy equity and if they want to invest, that suggests you have a valid idea. Or if you are expanding in a new business with no proven cash flow, you should use equity for the same reason. The disadavantage of debt financing is outside of a Bank approving your loan, there is no one testing the value of your idea. And you are legally obligated to pay back debt if your business fails; with equity you have no obligation to pay back investors.
What are the advantages and disadvatages of an all-stock-financed corporation, meaning no debt incurred?
Primary Advantages would be: more free cash flow for the business instead of servicing debt and interest, no bank covenants to limit your operational activities.
Disadvantages would be: more money is obviously at stake for the equity shareholders, no banker relationships in times of need for a line of credit, higher taxes due to no interest tax shields
There is much more if you want to get more complicated talk in terms of rate of return, etc.
But for a simple answer that is about it.
What are the advantages and disadvantages for American Superconductor?
What are the advantages and disadvantages for American Superconductor (AMSC) to forgo their debt financing and take on equity financing? Do you agree with their decision?
Advantage of equity financing: no interest expense, no debt payment due, low risk of cash flow liquidation.
Disadvantage of equity: dilution of ownership, higher overall cost of capital because interest payment on debt is an expense that is tax deductible (when AMSC starts making profit).
I think it is a wise choice for AMSC given its historical loss and its uncertain profit outlook.
The capital structure (presently 100% equity) can be changed. That is when AMSC will be sure of its profitability potential, it can do a partial leveraged buyout (LBO): borrowing money to buy back shares to establish a new debt vs equity structure optimal for that future positive free cash flow scenario.
What are the advantages and disadvantages for American Superconductor (AMSC) ?
What are the advantages and disadvantages for American Superconductor (AMSC) to forgo their debt financing and take on equity financing? Do you agree with their decision?
no i do not agree
advantages of debt financing - News
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