Text size

Negotiations are underway between the First International Bank and UPC to delay UPC's due date for repaying a loan. This would be achieved by enhancing guarantees including a lien on UPC's holdings in Tevel cable company.

Dutch UPC controls 46.5 percent of Tevel, but FIBI already has a lien on half of this because of a 55 million euro debt. UPC is due to repay the debt by 2002, but because of its dire situation FIBI has already had to make provisions for doubtful debt in the first quarter of 2002.

Another option currently being discussed is for the bank to forgive the debt in return for all of UPC's Tevel stake .

Tevel will account for about 34 percent in the merged cable company that is now in the making. If FIBI gains control of UPC's holdings in Tevel, it will thus have 15.8 percent in the merged company. Although this does not violate the 20 percent limit that banks are allowed to hold in corporations, it is nevertheless FIBI's policy not to have such holdings.

The bank prefers to do this through its affiliated company, FIBI Investment House. FIBI itself does not plan to become a shareholder in the merged cable company, and - should the bank foreclose on the lien - it will prefer to sell the stock.