French textiles and communications group Chargeurs is to take a 10% stake in one of the big three French cable operators, Lyonnaise Communications.
Chargeurs chairman Jerome Seydoux confirmed last week that the deal is in its final stages. Chargeurs’ arrival in the cabler’s shareholder lineup was made possible by the departure of bank Credit Agricole, which has been trying to sell its stake for the past 12 months.
Heavy losses continue
With around 230,000 subscribers at the end of last year, Lyonnaise Communications continues to post heavy losses. Results in 1992 showed a 175 million francs ($ 30 million) deficit and while 1993 losses are expected to be significantly lower, the cabler is still a long way from profitability.
Commenting on the deal, Jerome Seydoux said Chargeurs was driven by a desire to move into the cable industry rather than any hope of immediate profits.
Sources at Lyonnaise Communications say they expect Chargeurs’ investment to be finalized within the coming weeks.
The cabler’s shareholders will then include waterworks services company Lyonnaise des Eaux (58.3%), France Telecom (10%), Credit Lyonnais (9%), US West (7.4%), Canal Plus (5%) and Chargeurs (10.3%).
Seydoux’s group has gradually been building an impressive portfolio of entertainment investments.
On the TV front, Chargeurs has teamed up with Rupert Murdoch’s News Corp. for a stake in BSkyB and is a partner in Canal Plus’ satellite service Canal Satellite.
In the film industry, the group has backed Jake Eberts’ Allied Filmmakers, U.K. distribbery Guild, French production company Renn and leading indie distributor AMLF. Seydoux also controls one of the big three French exhibitors, Pathe, and has pacted with Morgan Creek and Warner Bros. to build multiplexes in Holland.
By allying itself to Lyonnaise Communications, Chargeurs comes a step closer to breaking into the pay-per-view market in France. Lyonnaise Communications tested PPV in Paris suburb St. Germain en Laye last year and is reported to be about to launch the service nationwide.
Chargeurs has been studying the possibility of developing PPV for more than a year.