Rogers Free Its annual financial report yesterday, in which it painted a happy future together with Shaw. But the report also detailed the hefty amount Rogers made after several deferred deadlines, as well as the C$26 billion merger deal not being completed by the March 31, 2023 deadline. What is the risk of having it.
But earlier this year, Rogers announced Strong Q4 earnings, with a 25 percent increase in its net income, and predicted good growth in its earnings guidance.
Rogers Chief Executive Officer (CEO) Tony Staffieri said, “Against the backdrop of the protracted pandemic, a new executive team, one of the largest proposed mergers in Canadian history was achieved, and against an unprecedented network outage. “
The telco giant also boasted of its record investment of C$3.1 billion in capital, including C$2.6 billion in technology and networks, and C$2 billion in free cash flow, excluding financing from Shaw.
The merger with Shaw and its many trials and successes was also detailed, but the report envisions a happy ending, the key to which lies with Industry Minister François-Philippe Champagne.
“Rogers, combined with Shaw, will become a strong, national cable, media and wireless company,” Staffieri said. “Together, with our scale and breadth of assets, this will allow us to add more value to our customers by bundling our services and offering a faster, more reliable network in more locations. We look forward to closing this transformational merger and delivering its many benefits to our customers, our communities and our country.
The deadline to close the transaction has had to be postponed twice, as Champagne said it was in no rush to transfer Shaw’s spectrum licenses to Videotron, pre-conditional parties to the divestment, upon which the merger would be completed. Being depends.
Staffieri said at Scotiabank’s TMT conference on Tuesday Reported by Cartt.cathat “time has allowed us to solidify our integration plans,” adding that Rogers is entering the transaction from a stronger position than it was 16 months ago.
However, the time it took for Champagne to issue a ruling and subsequent extended deadlines resulted in Rogers repeatedly flagging significant risks of financial penalties and lawsuits from investors.
Rogers also disclosed in his report that either Rogers or Shaw could terminate the merger if the Shaw transaction is not completed by the March 31, 2023 deadline at the latest.
The company specifically complained about the following possible consequences:
- pay a reverse termination fee of C$1.2 billion if the Shaw transaction does not complete
- pay legal, accounting, tax and financing fees, whether or not the merger is complete
- The company’s stock price, future financial performance and relationships with employees, suppliers, vendors, retailers, customers and others will be negatively affected.
- Upon closing, the company will be required to pay down up to C$40 billion of consolidated debt issued since the inception of the transaction.
- Credit rating downgrade in view of outstanding loans and higher borrowing costs in future
added to the report; “Even if we successfully integrate Shaw’s businesses, the anticipated benefits of the Shaw transaction may not be fully realized, or they may take longer than expected.”
Rogers highlighted total payments of C$819 million The SMR date has been extended to December 31, 2023 from December 31, 2022 (the initial closing date of the merger) as per the consent of the Special Compulsory Redemption (SMR) note holders. The concurrence ensures that the funding remains in place even after the deadline has passed.
also pointed out it paid C$27.2 million to the CRTC after the merger is approved in March 2022. Contributions were made to the broadcast system’s support through various initiatives including supporting local news, producing indigenous producers, hiring more reporters at CityTV, and more.
