WARSAW, Poland, Aug. 5 /PRNewswire-FirstCall/ -- Stream Communications Network & Media Inc. (the Company or Stream Communications) (OTC Pink Sheets: SCNWF & FSE: TPJ) announced today that Stream Communications Sp z o.o. (Stream Poland), controlled by Stream Communications and Penta Investments ("Penta"), has closed on the acquisition of cable operator Broker-Service Sp z o.o. ("Broker") with a network located in Southern Poland, for PLN 44 million, under the terms of the second phase of Penta's investment in Stream Poland. The agreement states that new shares in Stream Poland will be issued for proceeds of over PLN 100 million, to be used exclusively for system upgrades and acquisitions.
The transaction with Broker will be financed in the following manner: 1) Stream Poland will provide PLN 9.5 million cash.
2) Penta Investment subsidiary Cyfoca has loaned Stream Poland an additional PLN 34.5 million which will be converted into equity at the end of 2008. Because the share registration process in Poland is lengthy, the interim loan permits Stream Poland to make acquisitions in shorter time frames, while still enabling Penta to receive the agreed upon Stream Poland equity. The terms of the interim loan are as follows:
The principal amount of the loan, PLN 34.5 million, will be made under the conditions set out in Phase two of the Stream Communications-Penta agreement. Assuming that equity registration is completed and shares issued at the end of 2008, the lowest amount of shares issued to replace the loan is expected to be approximately 24,946 Stream Poland shares.
As of December 31, 2007 Broker had 27,233 Revenue Generating Units (RGUs) and approximately 25,000 Homes Passed (HP). Broker offers triple play services, cable TV, Internet and Telephony, through its broadband network. The areas Broker serves include Zory, Gliwice, Chrzanow and Libiaz. Integration of the Broker network into Stream Poland begins immediately.
Jan Rynkiewicz, president & CEO of Stream stated, "The acquisition of Broker significantly increases Stream Poland's subscriber base and strengthens our market position in Southern Poland, due to the proximity of the locations Broker serves to Stream Poland's existing networks."
About Stream Communications
Stream Communications is a broadband cable company that offers cable TV, high-speed Internet and VoIP services in Poland. Stream Communications, together with Penta Investments, controls the 7th largest cable operator in Poland, Stream Communications Sp z o.o., focusing on the densely populated markets of Southern Poland. Via its wholly owned subsidiary Stream Investments Sp z o.o., Stream Communications is developing greenfield projects in the cable sector in Poland.
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Except for statements of historical fact, the information presented herein constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund operations and changes in consumer and business consumption habits and other factors over which Stream Communications Network and Media Inc. has little or no control.
