HomeMy WebLinkAboutResolution - 86-91 - Refinancing Plan for Rogers Cable - RESOLUTION NO. 86-91
A RESOLUTION GIVING PRELIMINARY
APPROVAL TO A CHANGE OF OWNERSHIP
AND OF A REFINANCING PLAN OF THE
CITY ' S CABLE TELEVISION FRANCHISE.
WHEREAS, the City of Fdpn Pra i ri p , Minnesota, ( "city")
has granted a cable television franchise ( 11the Franchise" ) to
Rogers Cablesystems of Minnesota Limited Partnership ("the
Grantee") pursuant to City ' s cable communications ordinance ("the
Franchise Ordinance") ; and
WHEREAS, City has also adopted an ordinance (the "Relief
ordin.ance10) intended to provide financial relief to Grantee by
providing for a modification of Grantee ' s obligations for a
period of time in order to permit refinancing of Grantee' s
long-term debt and to enhance its financial viability; and
WHEREAS , Grantee has now proposed a refinancing plan, as
contemplated by the Franchise Ordinance and the Relief Ordinance
and seeks approval of such plan; and
WHEREAS , Rogers Cablesystems of Minnesota, Inc. ( "RCMI") is
the general partner of Grantee and is a wholly-owned subsidiary
of Rogers U. S. Cablesystems, Inc. ("RUSCI") ; and
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WHEREAS , the proposed refinancing calls for a change in
ownership of Grantee ' s general partner through transfer of the
ownership of the shares of RCMI from RUSCI to Rogers American
Cable Corp. ("RACC" ) , a wholly-owned subsidiary of Rogers
Cablesystems of America, Inc . ("RCA") ; and
WHEREAS , RCMI has represented to the Southwest Suburban
Cable Communications Commission ("SWSCC") , which acts on behalf
of the City on certain matters related to cable television, that
in conjunction with the proposed refinancing of Grantee, RCA will
make use of its line of credit from time to time as necessary to
provide funds to Grantee to meet operating expenses and debt
service payments; and
WHEREAS , it has also been represented by Grantee to SWSCC
that such transfer of stock ownership of RCMI will strengthen the
financial position of RCMI and will facilitate the refinancing of
Grantee ' s long-term debt; and
WHEREAS , SWSCC has engaged the firm of Touche Ross,
certified public accountants , to review this proposed transfer of
stock ownership of RCMI and the proposed refinancing; and
WHEREAS , Touche Ross has made an interim report to SWSCC
indicating that the proposed refinancing will lighten the debt
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service burden of Grantee through a reduction of interest rates
and an extension of the loan period; and
WHEREAS, Touche Ross recommend that, before final approval
of such proposed refinancing and stock ownership transfer,
certain additional information be provided and certain written
commitments be made by RACC and RCA; and
WHEREAS, RACC has indicated that it will offer to purchase
the interests of all the individual limited partners of Grantee,
which offer, if accepted, will also result in a change in
ownership of Grantee; and
WHEREAS , Minnesota Statutes Section 238 . 083 , and Article XII
of the Franchise Ordinance, require City approval of any change
in ownership of Grantee; and
WHEREAS , Article II, Section 4 , of the Franchise Ordinance
provides for a four-year extension of the Franchise. if Grantee
completes refinancing of its existing long-term indebtedness
before December 31, 1987 , and provides written evidence thereof
acceptable to the City; and
WHEREAS , it appears that the proposed change of ownership
will not adversely affect the Grantee ' s subscribers; and
WHEREAS , it appears that the proposed refinancing is likely
to benefit Grantee and may, in turn, permit Grantee to provide
better service to its subscribers than it would otherwise be able
to provide.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of , Minnesota, as follows:
1. The City herewith gives preliminary approval to the
following actions :
A. The transfer of the stock of RCMI from RUSCI to
RACC;
B. The purchase of the interests of the limited
partners of Grantee by RACC;
C. The refinancing of the long-term debt of Grantee
as proposed to SWSCC and as contemplated in Article II,
Section 4 , of the Franchise Ordinance.
2 . Final approval of these actions will be considered by
City, upon the occurrence of the following:
A. Grantee has filed wiLn City copies of executed
loan documents evidencing that Grantee has refinanced its
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long term debt as contemplated by Article II, Section 4, of
the Franchise Ordinance and as represented to SWSCC.
B. RCA has given written contractual commitment to
City, satisfactory to City, that it will provide financial
assistance as necessary to Grantee , during the term of the
ref:'_nancing loan, to enable Grantee to meet its operating
expenses and debt service payments .
C. Grantee, RCMI or RACC have certified to City that
the ownership of the stock of RCMI has been transferred from
RUSCI to RACC and that all actions incident to such trar!szer
have been duly authorized and taken.
D. RACC has executed and delivered to City an
acceptance and a guarantee of RCMI ' s performance of the
Franchise Ordinance, the Relief Ordinance and the
Performance Agreement between City and Grantee, accompanied
by such opinions of counsel as are required by Article XIV
of the Franchise Ordinance.
E. SWSCC has recommended to City that it give final
approval of the actions described in paragraph 1 of this
Resolution.
3 . Upon final City approval of the actions described in
paragraph 1 of this Resolution, the City will execute and deliver
an agreement with Grantee evidencing extension of the Pranchise
to December 31, 1999 .
Dated this day of , 1986 .
Mayor
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