FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of: July 17, 2001
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TRICOM, S.A.
(Translation of registrant's name into English)
AVENIDA LOPE DE VEGA NO. 95, SANTO DOMINGO, DOMINICAN REPUBLIC
(Address of principal executives offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-
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TRICOM ANNOUNCES AGREEMENT TO
ACQUIRE CABLE TELEVISION SYSTEM IN THE
DOMINICAN REPUBLIC
SANTO DOMINGO, Dominican Republic - July 16, 2001 - TRICOM (NYSE:TDR) a leading
integrated communications provider in the Dominican Republic, and a
facilities-based long distance carrier in the U.S. and Puerto Rico, announced
today that it has entered into a definitive agreement to acquire Telecable
Nacional ("TCN"), the largest multi-channel system operator in the Dominican
Republic's pay-TV market. Based on Friday's closing price for TRICOM's Class A
common stock, the transaction will be valued at approximately $1,130 per
subscriber equivalent or $63.7 million, payable in cash and TRICOM Class A
common stock. The transaction is subject to customary closing conditions, and is
expected to close in September 2001.
TCN is the leader of the Dominican cable TV market with a 43% market
share, serving approximately 52,000 residential subscribers with close to
150,000 homes passed and an additional 8,000 commercial customers. TCN primarily
operates in the capital city of Santo Domingo, where it has a 90% market share,
and the tourist cities of Puerto Plata and La Romana. Approximately 70% of TCN's
cable plant has been recently upgraded to 750MHz; the plant should be fully
upgraded by 2002. For the year ending December 31, 2001, TCN expects revenues of
approximately $19 million and EBITDA in excess of $7 million. TRICOM believes it
can realize near-term cost synergies ranging from $2 million to $3 million per
year and that it can potentially realize additional revenue and capital
expenditure synergies.
Arturo Pellerano, Chairman and Chief Executive Officer of TRICOM commented, "The
acquisition of TCN has positioned TRICOM to be the leading competitive provider
in the high-density metropolitan areas of the Dominican Republic with a bundled
package of local, long distance, and mobile telephony, video, and high-speed
data services. With the addition of cable TV entertainment to our existing
operations, we will be able to provide a full suite of competitive
telecommunications services."
"Cost synergies are substantial, and there is very little overlap between TCN
customers and our existing customers allowing for significant cross-selling
opportunities. In addition, TRICOM is adding a high quality management team with
telecommunications, network and operational expertise, as well as an
organization with a competitive mindset," added Pellerano.
Consideration for the $63.7 million purchase price will consist of $41.8 million
in cash and 3.375 million shares of TRICOM Class A common stock. The cash
portion of the purchase price will be funded through a $33.5 million credit
facility provided by TCN's
existing lenders and with cash on hand. The shares to be issued in connection
with the transaction will be subject to certain conditions, including "lock-up"
provisions that restrict the sale and transfer of the securities during a period
ranging from 12 to 30 months after the closing date.
The announcement also includes the appointment of Marino Ginebra, 55, Chairman
and President of TCN, to the TRICOM board of directors. "We welcome Marino
aboard and look forward to his contribution as Board member. His wide breadth of
operational and competitive management experience in the cable industry brings
an important additional perspective to our Board of Directors", said Pellerano.
TCN will add approximately 52,000 premium cable residential subscribers to
TRICOM's existing customer base, substantially increasing the Company's
penetration in the high-income residential market. The transaction is expected
to be immediately accretive to EPS and to have a positive free cash flow impact
within the next twelve months.
Bear, Stearns & Co. Inc. advised TRICOM in the transaction and Salomon Smith
Barney served as advisor to TCN.
ABOUT TRICOM
TRICOM (www.tricom.net) is a leading integrated communications service provider
in the Dominican Republic. Through the country's only 100% digital local access
network, a wireless network covering approximately 85% of the population and our
submarine fiber optic cable systems, we offer local, long distance, and mobile
telephony, as well as broadband data transmission services. Through TRICOM USA,
we own switching facilities in New York, Miami and Puerto Rico, providing us
with end-to-end connectivity, and are one of the few Latin American long
distance carriers that have a United States licensed subsidiary. With
substantial investments in submarine fiber optic cables providing us with the
capability to do end to end transmission of voice and data, we are positioned to
take advantage of opportunities to expand into highly attractive markets in
Central America and the Caribbean.
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THIS STATEMENT MAY CONTAIN CERTAIN FORWARD-LOOKING STATEMENTS, WHICH MAY INVOLVE
KNOWN AND UNKNOWN RISKS, UNCERTAINTIES, AND OTHER FACTORS NOT UNDER THE
COMPANY'S CONTROL, WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE AND ACHIEVEMENTS
OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM THE RESULTS, PERFORMANCE, OR
EXPECTATIONS OF THE COMPANY. THESE FACTORS INCLUDE, BUT ARE NOT LIMITED TO THOSE
DETAILED IN THE COMPANY'S PERIODIC FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TRICOM, S.A
Dated: July 17, 2001 By: /s/ Carl H. Carlson
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Carl H. Carlson
Executive Vice President
and Member of the
Office of the President