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UPC denies loan default
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November 21, 2000: 7:02 a.m. ET
Shares of Europe's No. 2 cable operator plunge for 2nd day despite reassurance
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LONDON (CNNfn) - Shares in United Pan-Europe Communications NV, Europe's second-largest cable company, tumbled more than 10 percent on Tuesday even after the company and its bankers denied rumors UPC might default on a 4 billion euro ($3.4 billion) loan.
The Amsterdam-based company's shares fell 8.5 percent to  9.75 by mid-session, valuing the company at 4.1 billion, after earlier plumbing a new low for the year of 8.70.
That came after market talk that UPC was facing financial difficulties slashed 24 percent off the price of the stock Monday. The shares have fallen 87 percent since March this year, when they rose as high as 83.32.
"There are some ongoing concerns about financing but we believe they are overdone," Sarah Simon, an analyst at Morgan Stanley Dean Witter, told CNNfn.com. "The company has enough funding for the next 18 months and has room to reduce its cash requirements."
UPC spokesman Bert Holtkamp dismissed speculation that the company was in danger of defaulting on a loan as groundless. The rumor had stemmed from one analyst's incorrect interpretation of the criteria that UPC's banks have attached to the loan.
"We are not in default on any loan," Holtkamp said. "We have the financing we need for the medium term."
His comments reiterated an assurance given in a statement released after the market closed Monday by UPC and creditor banks ABN Amro Holding NV, Bank of America Corp. (BAC: Research, Estimates), BNP Paribas (PBNP), Chase Manhattan Corp. (CMB: Research, Estimates), Royal Bank of Scotland PLC (RBOS) and TD Securities.
UPC, which has more than 8 million customers for its services in 17 European countries and Israel, has grown rapidly through acquisitions and is under pressure to raise new equity to fund expensive expansion projects because of its collapsing stock price. In May, UPC blamed the breakdown of its planned $2.8 billion acquisition of SBS Broadcasting on its increasingly weak shares.
The company in September received a vote of confidence from several corporate shareholders – including its parent UnitedGlobalCom Inc (UCOMA: Research, Estimates), Motorola Corp. (MOT: Research, Estimates) and Liberty Media Corp, a unit of AT&T Corp (T: Research, Estimates) – which backed the Dutch company with a 1.4 billion refinancing loan. Also on the cable company's shareholder list is software giant Microsoft Corp. (MSFFT: Research, Estimates), with 8 percent.
Holtkamp told CNN that Chief Financial Officer Charles Bracken plans to hold an emergency conference call with analysts this afternoon.
--from staff and wire reports 
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UPC
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