EXHIBIT 99.1
[MASTEC LOGO]
NEWS
For Immediate Release From MasTec, Inc.
April 1, 1996 8600 N.W. 36 Street, 8th Floor
Miami, Florida 33166
Tel: (305) 599-1800
Fax: (305) 599-1572
For more information contact:
Edwin D. Johnson,
Chief Financial Officer
MASTEC AGREES TO ACQUIRE TELEFONICA UNIT
MIAMI, FL - MasTec, Inc. (NASDAQ:MASX) and Telefonica de Espana, S.A.
announced today an agreement to sell 100% of the capital stock of Telefonica's
telecommunications construction services subsidiary, Sistemas e Instalaciones de
Telecomunicacion, S.A. ("Sintel"), to MasTec. Sintel is the leading
telecommunications construction services company in Spain and has operations in
Argentina, Chile, Peru and Venezuela.
The acquisition will more than double the size of MasTec, creating an
international telecommunications construction services provider with total
combined assets of approximately $480 million and more than 5,000 total
employees. The combined company will be one of the largest telecommunications
construction services companies in the world, with operations in 35 states,
Spain, Argentina, Chile, Peru and Venezuela.
The purchase price is $39.5 million (all dollar amounts in this release
reflect a current exchange rate of 124 Spanish pesetas to the dollar) and is to
be paid over three years.
For 1995, Sintel had: consolidated revenue of $390 million; operating
income, not including the restructuring charge, of $27.54 million; Earnings
before interest, taxes, depreciation and amortization, not including the
restructuring charge, of $32.55 million; and a
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net loss of $14.07 million, which includes a $27.86 million restructuring charge
resulting from personnel reductions and other cost cutting measures.
Candido Velazquez, Chairman of Telefonica, stated: "We are excited
about the sale of Sintel to MasTec in that it will allow Sintel to be part of a
global telecom services company which will afford it more growth opportunities.
In addition, Telefonica is pleased to work with MasTec as our leading
construction services partner across the world in further developing
Telefonica's core operations."
As part of the agreement and to contribute to the financial strength
and future viability of Sintel, Telefonica has agreed to the following:
o The award of a three year, $604 million construction
services contract.
o To make a capital contribution to Sintel of $24.2
million.
o To purchase certain fixed assets, land and buildings
for $12.1 million.
o To pay a tax credit to Sintel of $4.7 million.
The capital contribution, purchase of fixed assets and payment of the
tax credit have all been made prior to April 1.
The cash infusion from Telefonica is to be used to reduce Sintel's debt
to increase operating efficiencies.
The financial restructuring will leave Sintel with approximately $323
million in assets, including $232 million of accounts receivables, and total
debt of approximately $63 million.
Jorge Mas, Chief Executive Officer of MasTec, stated: "This is a
significant step in the history of MasTec, not only because of its size and
expected positive financial impact but because it is anticipated that Sintel
will provide us with high growth opportunities using an established company in
the emerging Spanish cable television market and the explosive Latin American
telecommunications market. By being removed from the Telefonica umbrella, Sintel
can now pursue a diversification strategy, expanding its client base to other
telecommunications companies. This also provides MasTec with additional human
resources throughout the world, which will better allow us to execute our growth
strategy."
Mr. Mas also indicated that Sintel's existing management, which
engineered an impressive turnaround in 1995 results, will continue to operate
Sintel. Sintel's current president, Jose Luis Ucieda Arcas, will remain as
president.
The acquisition has been approved by the respective boards of directors
of MasTec and Telefonica. Closing is scheduled for April 30, 1996.
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Financial Highlights (year ended December 31, 1995) (in U.S. dollars, at an
assumed exchange rate of 124:1, and which have been derived from the audited
financial statements of Sintel prepared under generally accepted accounting
principles in Spain, which differ from U.S. GAAP):
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SINTEL GROUP (1) SINTEL SPAIN
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Revenue $392,778,113 $251,995,266
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EBITDA $32,549,282 $20,027,556
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EBIT $27,536,331 17,124,411
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Interest Expense $17,563,282 $14,592,403
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Restructuring Expense $27,864,000 $26,538,637
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Net income (loss) $(14,078,766) $(15,168,758)
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(1) Includes Sintel-Spain as well as Sintel's South American subsidiaries,
which have been accounted for based on Spanish GAAP.
MasTec is filing today with the Securities and Exchange Commission a
Current Report on Form 8-K, to which reference is hereby made.
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