Imagine to start roll-out of €200m fast broadband system in 2016
Irish telecoms firm Imagine Communications will spend about €200m over the next five years rolling out a high-speed broadband network incorporating wireless technology, the Irish Independent has learned.
Imagine has secured €50m in financial backing from an international infrastrucuture fund for the deployment.
Imagine - whose shareholders include NTR and Kilsaran Concrete - also has new backers, with a consortium of French investors having injected €2.6m of equity into the Irish company. Imagine's €31.6m net debt at the end of 2014 has also been cut by €5.1m under an agreement.
Imagine executive chairman Sean Bolger declined to say who the French investors are, but a Switzerland-based Frenchman who's understood to be a property developer, Jacques Demeester, has recently been made a director of the telecoms firm.
The investment from the French investors was made via a Luxembourg vehicle called Balthus Finance.
NTR and Kilsaran, which previously held a combined 25pc stake in Imagine, now hold less than that but Mr Bolger declined to specify how much.
Mr Bolger and management own a combined 54pc stake in the business, he said. NTR and Kilsaran became shareholders in 2008 when they sold their Irish Broadband business to Imagine for €40m.
Other shareholders include venture capital firm DFJ Esprit.
The telecoms boss said that Imagine is currently trialling so-called LTE (Long Term Evolution) wireless technology at a location in Co Kildare. He said a plan for a national roll-out of the infrastructure will be announced early next year.
Mr Bolger said Imagine will operate the network on a wholesale basis, making it available to all operators.
Imagine will use the €50m funding facility it has secured from the infrastructure fund for the first phase of the LTE and fibre deployment, with cash flow providing the source of a further €150m in funding that will be invested over the next five years, according to Mr Bolger.
LTE can offer very fast broadband connections, and Mr Bolger said speeds will range from 30MB to 150MB.
The same infrastructure fund that's providing the financing for the project is also working with Imagine on its efforts to be part of the latest phase of the Government's National Broadband Plan, which aims to bring high-speed services to about 700,000 rural homes.
The latest set of accounts for Imagine show that its turnover fell to €31.6m from €38.9m, while its pre-tax loss widened to €10.2m from €8.8m.
Mr Bolger said the company hasn't been investing in its legacy business having taken a strategic decision to focus on LTE and said the non-cash writedown of assets contributed significantly to the reported loss.
The accounts also note that Imagine's ongoing litigation against Motorola in relation to a WiMax contract.
Imagine is suing Motorola for €138m and Mr Bolger said this week that he's confident Imagine will succeed in its case, which was launched in 2010.
However, Imagine has warned that if it loses, it may have to undertake a restructuring which may result in the disposal of some non-core assets. The case is set to be heard next year.
Under the terms of the contract with Motorola, Imagine still owes €12.9m.
But the Irish company said that while it's continuing to accrue the liability, it does not expect to have to pay it if it wins its court case.