COLT Telecom Group plc - Banco Best

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OFFERING MEMORANDUM STRICTLY CONFIDENTIAL COLT €320,000,000 COLT Telecom Group plc 7 5/8% SENIOR NOTES DUE 2009 Interest payable on 15 June and 15 December COLT Telecom Group plc is offering € 3 2 0 , 0 0 0 , 0 0 0 principal amount of its 7 5/8% Senior Notes due 2 0 0 9 . COLT is also offering € 3 6 8 , 0 0 0 , 0 0 0 principal amount of its 2 % Senior Convertible Notes due December 2 0 0 6 , including the over-allotment option which has been exercised, and 1 4 , 6 2 5 , 0 0 0 of its ordinary shares, pursuant to a separate offering memorandum. COLT may redeem any of the notes beginning on 1 5 December 2 0 0 4 . The initial redemption price is 1 0 3 . 8 1 2 5 % of their principal amount plus accrued interest. In addition, before 1 5 December 2 0 0 2 , COLT may give notice to redeem up to 3 5 % of the notes at a redemption price of 1 0 7 . 6 2 5 0 % of their principal amount plus accrued a n d unpaid interest using proceeds from certain types of offerings of its ordinary shares. The notes will rank equally with all our other senior notes and all other unsubordinated unsecured indebtedness. For a more detailed description of the notes, see "Description of the Notes" beginning on page 2 9 . COLT will apply to list these notes on the London Stock Exchange. The closing of each of the offerings is not conditioned upon the closing of the other offerings. Investing i n these notes involves risks. See "Risk F a c t o r s " beginning on p a g e 15. PRICE 100% AND ACCRUED INTEREST, I F ANY The notes have not been reģistered under the Securities Act of 1933, as amended, and are beinģ offered and sold only (a) outside the United States in compliance with Reģulation S under the Securities Act, and (b) to qualified institutional buyers in reliance on Rule 144A under the Securities Act. For a description of the restrictions on resale or transfer of the securities, see "Transfer Restrictions", beģinninģ on paģe 79. Morģan Stanley & Co. International Limited expects to deliver the notes to purchasers on 16 December 1999. Sole Book-Running Manaģer MORGAN STANLEY DEAN WITTER Lehman Brothers Dresdner Kleinwort Benson TD Securities 9 December 1999
Presentation of Financial Information 5 General Information 5 Summary 6 Risk Factors 15 Use of Proceeds 24 Capitalisation 25 Recent Developments 27 Description of the Notes 29 Taxation 68 Private Placement 76 TABLE OF CONTENTS Page Page Transfer Restrictions 79 Legal Matters 81 Independent Chartered Accountants 82 Appendix A — Press Release for the Unaudited Results of the Three and Nine Months Ended 30 September 1999 A-1 Appendix B — Annual Report on Form 20-F for the Fiscal Year Ended Not 31 December 1998 Included Appendix C — Audited Financial Statements C-1 Not Appendix D — Additional Disclosure Included The Appendices included herein contain certain important information about COLT Telecom Group plc, its financial conditions and its results of operations. These Appendices are incorporated into, and constitute an important part of, this offering memorandum. In this offering memorandum, "COLT," "we," "us," and "our" refer to COLT Telecom Group plc. CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILISE, MAINTAIN OR OTHERWISE AFFECT THE PRICES OF THE ORDINARY SHARES AND THE NOTES. SPECIFICALLY, THE PLACEMENT AGENTS MAY OVERALLOT IN CONNECTION WITH THE OFFERING AND MAY BID FOR, AND PURCHASE, NOTES IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PRIVATE PLACEMENT." The indenture pursuant to which the notes will be issued will require COLT, and COLT intends, to distribute to the holders of the notes annual reports containing consolidated financial statements of COLT audited by its independent chartered accountants and quarterly reports containing unaudited consolidated financial data for the first three quarters of each financial year. This confidential offering memorandum does not constitute an offer to sell, or a solicitation of an offer to buy, any of the securities by any person in any jurisdiction in which it is unlawful for such person to make an offering or solicitation. Neither the delivery of this offering memorandum nor any sale made hereunder shall under any circumstances imply that there has been no change in the affairs of COLT or that the information set forth herein is correct as of any date subsequent to the date hereof. COLT, having made all reasonable enquiries, confirms that this offering memorandum (including the information in the Appendices hereto), contains all information with respect to COLT and the notes which is material in the context of the issue and offering of the notes, that such information is true and accurate in every material respect and is not misleading in any material respect and that this offering memorandum does not omit to state any material fact necessary to make such information not misleading. The opinions, assumptions and intentions expressed in this offering memorandum with regard to COLT are honestly held, have been reached after considering all relevant circumstances and are based on reasonable assumptions. COLT accepts responsibility for the information contained in this offering memorandum accordingly. No person has been authorised in connection with any offering made hereby to give any information or to make any representation other than as contained in this offering memorandum and, if given or made, such 2
Page 1 and 2: COLT Telecom Group plc (Incorporate
Page 3: PART 1 This part contains the text
Page 7 and 8: THE SECURITIES EXCHANGE ACT OF 1934
Page 9 and 10: SUMMARY You should read the followi
Page 11 and 12: our expansion plans, if any of the
Page 13 and 14: Ranking The notes will rank equally
Page 15 and 16: SUMMARY FINANCIAL DATA The followin
Page 17 and 18: activities (as determined in accord
Page 19 and 20: amounts on the secured debt would s
Page 21 and 22: • other factors, including market
Page 23 and 24: incur significant expenses. This co
Page 25 and 26: Board of Directors, amendment of ou
Page 27 and 28: USE OF PROCEEDS Our net proceeds fr
Page 29 and 30: • 35,646,824 ordinary shares issu
Page 31 and 32: We also intend to continue to expan
Page 33 and 34: Definitive Registered Securities Un
Page 35 and 36: (2) if the notes are not listed on
Page 37 and 38: Indebtedness if, after giving effec
Page 39 and 40: (2) any Liens granted pursuant to t
Page 41 and 42: applicable to mergers, consolidatio
Page 43 and 44: Limitation on the Issuance and Sale
Page 45 and 46: (B) The foregoing limitation does n
Page 47 and 48: Events of Default The following eve
Page 49 and 50: Consolidation, Merger and Sale of A
Page 51 and 52: Defeasance and Certain Other Events
Page 53 and 54: Whenever this offering memorandum o
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the United Kingdom or of any other
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Reports The book-entry depositary h
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"Acquired Indebtedness" means Indeb
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(1) a "person" or "group" (within t
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Subsidiaries (which shall be as of
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(2) the fair market value of the as
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"Permitted Liens" means: (1) Liens
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(1) for the most recent fiscal year
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General TAXATION The following is a
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Revenue, it will authorise subseque
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U.S. Holder generally will be requi
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premium must reduce its tax basis i
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PRIVATE PLACEMENT Under the terms o
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• the issuance by COLT of any opt
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this paragraph. These restrictions
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INDEPENDENT CHARTERED ACCOUNTANTS T
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THIRD QUARTER HIGHLIGHTS • Turnov
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COLT's reputation for service excel
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FINANCIAL REVIEW Turnover Turnover
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and £154.2 million in the three an
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BALANCE SHEET At 31 December At 30
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NOTES TO FINANCIAL STATEMENTS 1. Ba
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NOTES TO FINANCIAL STATEMENTS — (
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NOTES TO FINANCIAL STATEMENTS — (
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Audited Financial Statements AUDITE
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PRICEWATERHOUSECOOPERS To the Board
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BALANCE SHEET Consolidated At 31 De
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STATEMENT OF TOTAL RECOGNISED GAINS
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Tangible fixed assets Tangible fixe
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Segmental analysis for the year end
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5 . EMPLOYEE INFORMATION The averag
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8. LOSS PER SHARE The Company has a
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1 1 . SUBSIDIARY UNDERTAKINGS The C
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1 3 . CAPITAL AND RESERVES CAPITAL
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RESERVES Contributed Share Merger S
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Senior discount notes In December 1
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18. ACQUISITIONS On 15 July 1998 th
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2 1 . FINANCIAL COMMITMENTS The gro
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2 6 . COMPANY BALANCE SHEET Notes A
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2 7 . SUMMARY OF DIFFERENCES BETWEE
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d. Consolidated cash flow statement
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COLT BOWNE Printed in London U41447
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N a m e D a t e / c o u n t r y Pri
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(4) A company incorporated with unl
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Trade payables 29,961,100 Other cre
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6. MATERIAL CONTRACTS In addition t
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(i) acts as a custodian of the Note
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ules apply to trusts which own asse
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(D) Coopers & Lybrand have given an
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