Net looks for cash, way out of junk label

Recapitalization could help co. survive pay TV slump

RIO DE JANEIRO — Debt ratings agency Standard & Poor has lowered the rating of Brazil’s leading cabler Net, formerly named Globo Cabo, to junk status on fears that a recapitalization may not go through.

The only publicly traded cabler in Latin America, Net is controlled by Organizacoes Globo, Microsoft private bank Bradesco, media group RBS and government bank BNDES.

The shareholders (minus Microsoft) plan to give the struggling cabler a capital infusion of 1 billion reais ($430 million) to pay down its debt, which hit $650 million at the end of 2001.

S&P lowered the rating because the recapitalization depends on the cabler’s ability to renegotiate its short-term obligations.

Net’s investor relations director, Leonardo Pereira, said that the recap and renegotiations may take place simultaneously, but he does not foresee having to cancel the recap.

Analysts say the deal will help Net weather the pay TV crisis. All feevee operators have suffered from the economic slowdown and depreciation of the local currency.

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