Colt Telecom raises pounds 190m for expansion

The fast growing business telecoms operator, Colt Telecom, yesterday raised a further pounds 190m to finance the expansion of its network into five more cities on the Continent.

Colt, which began operations in London four years ago, is raising pounds 98m by way of a secondary share offering and pounds 90m through two further debt issues. This brings total funding since 1993 to pounds 400m.

The company is currently providing local telecoms services in London, Frankfurt, Hamburg, Munich and Paris through digital fibre-optic networks. The expansion will take it into Brussels, Zurich, Milan and two other cities chosen from Dusseldorf, Stuttgart or Amsterdam.

Colt specialises in business-to-business telecoms, targeting the high- value end of the market, such as high bandwidth video, data and Internet transmission. The business was founded by the giant US mutual fund group, Fidelity, which began a similar operation in the North American market in the late 1980s and then decided to export the concept to Europe.

Colt now has 1,000 customers including Reuters, The London Stock Exchange, the Royal Mail, Siemens, Dresdner Bank and Deutsche Bank.

The new shares are being issued at 585p compared with last night's closing price of 598.5p and will give Colt a market capitalisation of about pounds 600m.

-Michael Harrison