BICC Plc, the London W1-based cables and construction group is to extend its equity stake in the Spanish cablemaker Grupo Espanol General Cable. The Spanish company is split into two divisions: Power which produces power cables, and Telecommunications which produces both metallic and fibre optic telecommunication cables. The Telecommunications division sells its products to Telefonica and accounted for 43% of the group’s UKP300m turnover – the group as a whole only managed to produce UKP15m in net profits in 1989. In January BICC acquired a 20% stake in el Grupo and part of BICC’s planned future investment in the company was that the management of el Grupo, BICC and a number of banks would buy the Spanish cablemaker in a management buyout led by Bankers Trust – the banks have agreed to sell their 29% interest in the company to BICC in 1992. BICC is now buying the 19% equity stake in el Grupo held by Bankers Trust at the same price for which it acquired the first 20%, so that BICC will own 39% of the company. BICC has granted the Spanish company’s management the right to sell up to 51% of the company to BICC at a price based on a multiple of 12.5 times an average of after tax earnings for 1990 and 1991. BICC and the management of el Grupo intend to float 25% of the Spanish company in Spain in 1992. To finance all this BICC has announced a rights issue of UKP177m 10.75% Convertible Capital Bonds 2020 on the basis of 13 bonds at 100 pence each for every 20 BICC ordinaries.
