HomeMy WebLinkAboutResolution - 86-219 - Approving Transfer of Controlling Interest in City's Cable TV Franchise - $ RESOLUTION
N0. 86--219
RESOLUTION GIVING FINAL APPROVAL
TO A TRANSFER OF CONTROLLING INTEREST
IN CITY 'S CABLE TELEVISION FRANCHISE.
WHEREAS, The City of Eden Prairie, Minnesota , ( "City") has
granted a cable television franchise (the "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
Ordinance") 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 , the Southwest Suburban Cable Commission
(hereinafter SWSCC) has adopted a Resolution, a copy of which is
incorporated herein and made part hereof, recommending approval
of the transfer of controlling interest in Grantee, approval of
Grantee refinancing its long-term debt, and recommending approval
of the extension of the Franchise Ordinance term; and
WHEREAS , the Resolution of the SWSCC recommends compliance
by Grantee of certain conditions ; and
WHEREAS , it is intended that this Resolution will serve to
approve the refinancing plan of Grantee that includes first, with
the adoption this Resolution, the approval of the transfer of
controlling interest in Grantee, and second, based on the
transfer of the controlling interest in Grantee and refinancing
according to an amendment to a Loan Agreement, an opportunity for
improving the financial operating condition of Grantee ;
WHEREAS, Rogers Cablesystems of the Southwest, Inc. ,
formerly Rogers Cablesystems of Minnesota, Inc. ("RCSI") is the
general partner of Grantee and is a wholly-owned subsidiary of
Rogers U.S . Cablesystems, Inc. ( "RUSCI") ; and
WHEREAS, the proposed transfer of controlling interest calls
for a change in ownership of Grantee ' s general partner through
transfer of the ownership of the shares of RCSI from RUSCI to
Rogers American Cable Corp. ("RACC") , a wholly-owned subsidiary
of Rogers Cablesystems of America, Inc . , ("RCA") ; and
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WHEREAS , RCSI and Grantee have represented to the SWSCC,
which acts on behalf of the City on certain matters related to
cable television, that in conjunction with the proposed transfer
of controlling interest in Grantee, RACC 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
RCA will also guarantee performance of Grantee ' s under the
Franchise Ordinance and Relief Ordinance ; and
WHEREAS , it has been represented by Grantee to SWSCC that
such transfer of stock ownership of RCSI will strengthen the
financial position of RCSI 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 RCSI and the proposed refinancing; and
WHEREAS , Touche Ross has made a report 'to SWSCC indicating
that it has reviewed financial material provided to it by RCA and
has found that its financial condition is healthier than that of
RUSCI; and
WHEREAS , simultaneous with the transfer of controlling
interest in Grantee to RACC an offer was made to the individual
limited partners in Grantee to acquire this interest with limited
partners holding approximately sixty percent (60%) of the units
agreeing to the sale. RACC has assigned its right to purchase
these units to RCSI ; and
WHEREAS , Minnesota Statutes Section 238 . 083 , and Article XII
of the Franchise Ordinance, require City approval of any transfer
of controlling interest of Grantee; and
WHEREAS , it appears that the proposed transfer of
controlling interest will not adversely affect the Grantee' s
subscribers ; and
WHEREAS , it appears that the proposed transfer of
controlling interest 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.
WHEREAS , City finds that Grantee has complied with the
conditiRns imposed 4n,a Preliminary Resolution passed by City and
dated
WHEREAS , the City considered t e transfer o controlling
interest request at its meeting on q7_ , reviewed
the Resolution and recommendation of t e Ws CC and the
presentation from its staff, discussed the requests with
representatives of Grantee, and considered all of the reports and
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information presented to it at its meeting and finds, based on
the foregoing; that
A. All procedural requirements set forth in the Franchise
and Minnesota state law regarding the consideration of a cable
communications system franchise transfer of controlling interest
and the approval of the refinancing have been complied with;
B. The proposed transfer of controlling interest and
refinancing would be in the public interest as contemplated under
the Franchise and that the transferee has demonstrated that the
transfer of controlling interest will enable the transferee to
finance the cable communications system in a more efficient
manner than currently existing, thereby eliminating potential
financial pressure and cash flow problems on the systems and on
future subscriber rates ;
C. As part of the transfer of controlling interest request
and approval of it, the City has relied upon SWSCC' s financial
consultant representations that: by having assurances from the
parent organizations of Grantee the financial strength of the
cable communications system will be improved; and, in reliance
upon this, City has requested Grantee to secure approval from the
parent organizations to execute an Agreement of Joint and Several
Liability, to be executed by Rogers Cablesystems , Inc. , a
Canadian corporation, ("Canadian" ) , RCA and RACC ; and
Y D. With the completion of the refinancing as contemplated
by the Amendment to Loan Agreement, the provision of Article II,
Section 4 of the Franchise Ordinances of the Members Cities will
be satisfied, and upon execution of an Agreement between Grantee
and each City acknowledging the completion of refinancing and
payment of the "Existing Indebtedness" , as described in Article
II, Section 4 , the Franchise Ordinance will be extended by four
(4) years;
E. The terms of the refinancing and the transfer, of
controlling interest should be approved effective July 31, 1986,
and finds that provisions of Article XII, Section 1 of the
Franchise Ordinance and Section 238 . 083 of the Minnesota Statutes
are complied with and the terms of the refinancing and transfer
of controlling interest are acceptable.
WHEREAS , City will authorize SWSCC to file with the
Commissioner of Commerce, as required under Minnesota law, the
necessary documentation reflecting the process involved in the
approval of the transfer of controlling interest in Grantee and
the agreements executed between the parties.
NOW, THEREFORE, BE IT RESOLVED that City hereby approves of
the transfer of the controlling interest in Grantee and the
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acquisition of the limited partnership units by RCSI, subject to
the following conditions:
1. Receipt from Grantee of final signed Resolutions, which
will be substantially in form and substance in conformance with
the Resolutions presented to SWSCC and attached to the SWSCC
Resolution, from RUSCI , RACC, RCA and RCSI and attorney' s opinion
in a form acceptable to City, and compliance with all
requirements of Article XIV, Section 2 of the Franchise
Ordinance;
2 . Execution by Grantee, and its parent corporations, of
all necessary documents including an Acceptance, a Joint and
Several Liability Agreement all in a form acceptable to City, and
a Certification that all requirements of Article XIV, Section 2
have been complied with.
3 . Receipt by SWSCC of authority from Grantee to file with
the Commissioner of Commerce the information relating to the
transfer of controlling interest and refinancing. and extension of
term of Franchise Ordinance together with the authority from each
Member City for SWSCC to do this filing.
4 . Upon refinancing being completed Grantee will execute
an Agreement together with City that will acknowledge that the
refinancing, effective July 31, 1986 , is complete and
satisfactory according to the terms of Article II, Section 4 of
the Franchise Ordinance and that the Franchise Ordinance term is
extended by four (4) years.
5 . The SWSCC is hereby authorized on behalf of City to
make said filings as may be required with the Minnesota Commerce
Department under Section 238 . 085 of Minnesota Statutes.
4 . Grantee will pay the reasonable costs and disbursements
of the SWSCC and its Member Cities directly related to the review
and approval of its refinancing plan and the transfer of
controlling interest approved by this Resolution.
Passed and adopte this 0) day of ,
1986, by the City of PA) 1 V,01- —
DATED: I�� CITY OF EDEN PRAIRIE
By
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