Orion Cable battling for existence
German cable heavyweight Orion Cable is apparently struggling for survival. According to a report in Financial Times Deutschland, debts of €1.8 billion are threatening to crush the company, which is owned by financial investors currently working on a restructuring of the debt.
Numerous investors led by UK-based private equity company Aletheia have acquired various German cable operators since the end of 2005, out of which they formed the Orion cable concern with the Tele Columbus group at its core. In order to finance the acquisitions, Orion has been burdened with enormous debts.
Orion’s holding company Escaline accumulated €77 million in interest payments in the first four months of this year alone, whilst making an operating profit of only €49 million, the newspaper reports, citing internal documents. Additionally, Tele Columbus has to shoulder €20 million in consultancy fees annually, according to an insider, with further management fees in the millions being paid to individual Escaline shareholders.
Company head Robert Fowler confirmed that negotiations over a reorganisation and debt restructuring were taking place at Orion. He did not want to rule out his stepping back from all posts at the company in the near future, although he denied any involvement in Orion’s running into trouble. Instead, he said, the company’s problems only started because of the financial crisis.