Creditors to Unsere Grüne Glasfaser (UGG) have picked Lazard Inc to advise them in talks over the troubled fiber operator's debt load. UGG, which is backed by Allianz Capital Partners and Telefónica SA, is one of many firms in Germany struggling to finance its planned build-out of fiber-optic networks, as higher financing costs and slower-than-expected uptake of fast broadband pressure business plans. UGG has a credit line of €1.65 billion ($1.85 billion), according to public statements. Spokespeople for UGG, Lazard, Allianz and Telefónica declined to comment.
UGG recently brought investment bank Perella Weinberg Partners on board to help on its side of the negotiations, given the firm's expertise in restructuring infrastructure companies, according to people familiar with the matter. The company had previously been aiming for a more straightforward refinancing, the people added. A spokesperson for Perella Weinberg did not immediately respond to a request for comment.
The entire fiber market in Germany is under strain after investors and banks poured billions into funding superfast broadband to capitalize on the trend toward home-working and the digital economy. Many operators have struggled to generate sufficient cashflows while still requiring additional funding to complete rollout plans. That has prompted a wave of restructuring and insolvencies, with market experts pointing to likely consolidation as weaker players fold.
UGG looked set to lead this trend, snapping up weaker rival Infrafibre in 2024. The deal was intended to boost both companies' revenues, with Infrafibre able to sell its internet services on UGG's network while UGG would benefit from higher utilization.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing