PR Newswire: news distribution, targeting and monitoring

Dynegy to acquire European connectivity provider iaxis limited

Share with Twitter Share with LinkedIn

Launches Dynegy's Communications Platform in Europe

Names Matt Epling Managing Director, Dynegy Europe Communications

Establishes Vehicle for Future Bandwidth Marketing, Trading and Risk Management in Continental Europe

Houston and London - Dynegy Inc. (NYSE: DYN), a leading provider of energy and communications solutions, has announced that an affiliate of Dynegy Global Communications, its wholly owned communications subsidiary, has signed an agreement to acquire iaxis Limited, a privately held, London-based communications company. The purchase is expected to close early in the first quarter of 2001.

iaxis Limited is owned by iaxis NV, a Dutch venture capital holding company. Through its four wholly owned subsidiaries located in France, Germany, Italy and Spain, iaxis Limited owns and operates an 8,750-mile (14,000-kilometer), 10-gigabit fiber optic network throughout Europe. The network also has state-of-the-art equipment and technology deployed at more than 40 strategically located co-location, data center and hub sites throughout Europe.

"This acquisition firmly establishes the platform for the expansion of Dynegy's network connectivity and broadband communications strategy into Europe and is an ideal complement to Dynegy's existing U.S. operations," said Chuck Watson, chairman and chief executive officer of Dynegy Inc. "For a cost of less than US$200 million, Dynegy will have a significant presence in the European communications marketplace."

Dynegy expects no further dilution from its communications segment as a result of this transaction and, as previously announced, continues to estimate a dilution of $0.025 to $0.05 per diluted share from this segment in 2001. Furthermore, the company continues to believe its communications business activities will have positive earnings before interest, taxes and depreciation (EBITD) by late 2001 and contribute to earnings by the second half of 2002.

"The iaxis Limited network, combined with its telecommunications licenses and registrations in many major Western European countries, will provide immediate access to the continent's largest markets," said Larry McLernon, DGC Chief Executive Officer and President. "This acquisition will accelerate the execution of Dynegy's plan to capitalise on the opportunities from the increasing wholesale demand for Continental and trans-Atlantic communications solutions."

On September 4, 2000, Steven Pearson, a partner at PricewaterhouseCoopers, was appointed as joint administrator to iaxis Limited. The joint administrators were appointed to manage the business of iaxis Limited while they marketed the business for sale and formulated a reorganisation of the company. According to Pearson, under the proposals, creditors of iaxis Limited could receive up to $0.40 on the dollar, as compared to significantly less if the proposals are not approved.

Under the proposed arrangements, an affiliate of DGC will purchase the shares of iaxis Limited for nominal consideration. In addition, Dynegy will contribute $40 million to iaxis Limited for distribution to existing creditors in final settlement of the company's unsecured debts and other obligations. Creditor approval of the arrangements is to be sought in late November/early December 2000.

The board of directors of iaxis NV and the board of directors of Dynegy Inc. have approved the purchase agreement, conditioned upon approval by iaxis NV's shareholders who are expected to approve the agreement on November 10, 2000.

Following the completion of these transactions, Dynegy will establish Dynegy Europe Communications Limited (DEC), a new subsidiary of DGC that will implement the company's goal to become a leader in the broadband marketing and trading arena in Europe. In addition to the purchase price, Dynegy expects to incur approximately $160 million related to network build-out costs and the payment of certain iaxis Limited pre-existing liabilities and other obligations.

Matt Epling, former managing director of Europe for Extant, Inc., a Colorado-based wholesale communications provider acquired by Dynegy in September 2000, will become managing director of DEC. The new company is expected to be headquartered in Vienna, Austria, with country offices in London, Berlin, Paris, Milan, and Amsterdam. Dynegy said it expects to transition iaxis Limited's existing 25 employees into the new company.

"Initially, Dynegy's focus will be to capitalise on the near-term revenue opportunities utilising iaxis Limited's assets, which will provide immediate connectivity to our U.S. network," said Matt Epling. "Our long-term strategy will be to apply the marketing, trading and logistics optimisation skillset that has made Dynegy a leader in power and natural gas to become the wholesale communications provider of choice throughout Europe."

Dynegy Inc. is a leading provider of energy and communications solutions to customers in North America, the United Kingdom and Continental Europe. The company's leadership position extends across the entire convergence value chain, from broadband, power generation and wholesale and retail marketing and trading of power, gas, coal, emission allowances, and weather derivatives to transportation, gathering and processing.

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Dynegy believes that its expectations are reasonable, it can give no assurance that these expectations will prove to have been correct. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include fluctuations in commodity prices for natural gas, electricity, natural gas liquids, coal or communications products or services; competitive practices in the industries in which Dynegy competes; operations and systems risks; environmental liabilities, which are not covered by indemnity or insurance; general economic and capital market conditions, including fluctuations in interest rates; and the impact of current and future laws and governmental regulations (particularly environmental regulations) affecting the energy and communications industry in general, and Dynegy's operations in particular.

For more information about Dynegy, please visit the company's web site at www.dynegy.com.

EDITORS' ADVISORY: The iaxis Limited purchase will be discussed in further detail during the Dynegy Analyst Conference on November 7, 2000. The conference will be broadcast live beginning at 8:00 a.m. CST. To hear the audio portion of the presentations, please call +1-877-679-9045 and tell the operator you want to listen to the Dynegy Analyst Conference. To view the slide portion of the presentations, please go to http://www.dynegy.com/financials.nsf/pages/Investor+Relations+Home+Page. There will be no rebroadcast of the conference.

SOURCE



Journalists and Bloggers

Visit PR Newswire for Journalists for releases, photos and customised feeds just for Media.

View and download archived video content distributed by MultiVu on The Digital Center.

Share with Twitter Share with LinkedIn
 

Get content for your website

Enhance your website's or blog's content with PR Newswire's customised real-time news feeds.
Start today.

 

 
 

Contact PR Newswire

Send us an email at MarketingUK@prnewswire.co.uk or call us at +44 (0)20 7454 5382

 

 
 

Become a PR Newswire client

Request more information about PR Newswire products & services or call us at +44 (0)20 7454 5382

 

 
Regulatory News Search
Search
  
  1. Products & Services
  2. Knowledge Centre
  3. Browse News Releases
  4. Meet the Media
  5. Contact PR Newswire