NEW YORK — John Malone’s Tele-Communications Inc., continuing its strategy of selling off smaller cable systems to draw down its debt, signed a partnership agreement Friday in which TCA Cable will absorb 18 TCI cable systems in Texas and Louisiana and shoulder $250 million of TCI’s debt.
TCA, the nation’s 16th-largest MSO (multisystem operator) compared with No. 1 TCI, will own 80% of the partnership and will run the operation as managing partner. TCA also will contribute to the partnership 14 of its cable systems located in the same area and put up $45 million in TCA debt. The 18 TCI systems reach a total of about 150,000 subscribers and TCA’s 14 get into about 155,000 cable homes.
“This is a good financial move for both of us,” said Robert Roseman, VP of business development for TCA. According to Roseman, TCA, which is based in Tyler, Texas, has a long track record of operating cable systems in the Southwest, and its 3.75-to-1 debt-to-cash-flow ratio “makes us one of the lowest-leveraged cable operators in the business.”