<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
Date of Report: December 6, 1999
-----------------
VERSATEL TELECOM INTERNATIONAL N.V.
(Exact name of Registrant as specified in its charter)
Paalbergweg 36
1105 BV Amsterdam-Zuidoost
The Netherlands
(Address of principal executive offices)
-----------------
Indicate by check mark whether the registrant files
or will file annual reports under cover
Form 20-F or Form 40-F.
Form 20-F X Form 40-F
--- ---
Indicate by check mark whether the registrant by furnishing
the information contained in this Form is also thereby
furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the
Securities and Exchange Act of 1934.
Yes No X
--- ---
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- N/A
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<PAGE> 2
VERSATEL TELECOM INTERNATIONAL N.V.
FORM 6-K
ITEM 5. OTHER INFORMATION
On December 6, 1999, VersaTel Telecom International N.V. (the "Company")
we announced that it entered into a binding agreement to acquire all of the
issued and outstanding capital of VEW Telnet, for a total purchase price valued
at E120 million, consisting of E65 million in cash and E55 million of deferred
payments under a three-year earnout agreement, subject to performance
adjustments, from VEW Energie. The acquisition provides for a 30-year
Indefeasible Right of Use of VEW Telnet's fiber network at no additional cost,
which is owned by VEW Telnet's former shareholder, VEW Energie.
The deferred payments of E55 million are spread out over a three year
period and are conditional upon VEW Telnet achieving certain revenue targets in
each of the next three years. No adjustments will be made if the revenue targets
are exactly met, and we will pay the full E55 million to VEW Energie. In the
event such targets are exceeded, VEW Energie will be entitled to an incremental
adjustment equal to 60% of the additional turnover in respect of the applicable
financial year. However, the maximum amount payable to VEW Energie over the
three year period is limited to E20 million, which, if payed, would increase the
amount of the deferred payment to E75 million. Conversely, in the event the
revenue targets are not attained, VersaTel will be entitled to an adjusting
deduction equal to 60% of the shortfall in respect of the applicable financial
year, up to a maximum of E4,583,333 in each year. The adjustment deduction over
the three year period is limited to E13,745,000, which would mean a decrease in
the amount of the deferred payment to E41,255,000.
The closing of the acquisition is subject to final supervisory board
approval from VEW Energie, which is anticipated to occur on December 8, 1999.
The completion of the offerings is not conditioned on the closing of the Telnet
acquisition.
The acquisition represents a key geographic expansion for VersaTel into the
Northwest Rhine region of Germany that is contiguous to VersaTel's existing
broadband network in the Benelux. VersaTel believes that the acquisition of VEW
Telnet is a logical extension of VersaTel's strategic focus due to similarly
high business concentrations and favorable demographics in VEW Telnet's market.
VersaTel will provide a full package of high bandwidth, local access services in
this expanded geographic region over VEW Telnet's approximately 1,400 km fiber
optic network.
2
<PAGE> 3
VEW Telnet is a leading regional telecommunications operator in the
Westphalia-Lippe region of Germany, including the heavily industrial eastern
Ruhr District. Telnet has approximately 3,800 business customers, 1,300
residential customers (excluding call by call activities) and 225 employees.
This region of Germany, which has a population of approximately 9 million
inhabitants, represents approximately 10% of the population of Germany and over
240,000 addressable business customers.
Upon completion of the acquisition, VersaTel will gain access to
approximately 1,400 km of fiber optic network, primarily consisting of 18
fibers. VEW Telnet's backbone network consists of an STM 16 ring, capable of
transmission rates up to 2.5 Gbits/s, approximately 160 SDH nodes/PoP locations,
and 7 points of interconnection with Deutsche Telekom. To accelerate local
access fiber connections, VersaTel has secured the right to jointly build with
VEW Energie by utilizing its power network rights-of-way, giving VersaTel the
ability to build additional fiber network and customer connections. In addition,
VEW Telnet is currently operational in 33 main distribution frame
("MDF")/central office ("CO") locations and expects to be operational in 3 more
by the end of 1999. Together, these 36 MDF locations represent approximately 12
percent of the addressable market in the Westphalia-Lippe region.
VersaTel intends to expand VEW Telnet's access to Deutsche Telekom's MDF
locations in the region by extending VEW Telnet's existing network to additional
Deutsche Telekom MDF locations. We believe approximately 80% of the market is
connected to 325 MDF locations in this region). VersaTel plans to leverage
Deutsche Telekom's existing copper infrastructure to deploy DSL access, as well
as build local access fiber connections, to provide a full package of high
bandwidth, local access services to German customers.
VersaTel intends to maintain a strong relationship with VEW Energie after
the closing of the acquisition and will enter into a 12 month telecommunications
services contract with an additional 5 year "right of last offer" provision. The
acquisition agreement provides that VersaTel will have the exclusive right to
use VEW Energie's existing and future telecom infrastructure. In addition, the
acquisition agreement provides that VEW Energie and VersaTel will assess the
possibilities of cross-selling and product bundling and VersaTel will be allowed
to market its services to VEW Energie's power customers. VEW Telnet is also a
member of RegioNet, a cooperation between 6 adjacent regional carriers to reduce
termination costs and realize interconnection synergies in Germany.
VEW Telnet's revenues on a German GAAP basis were E9.1 million for the
twelve months ended December 31, 1998 and are estimated to be E14.5 million for
the nine months ended September 31, 1999.
The Company issued a press release relating to the acquisition of Telnet. A
copy of the press release is attached hereto as Exhibit 99.1 and is incorporated
herein by reference.
The following limited financial data of VEW Telnet have been prepared in
accordance with German generally accepted accounting principles.
3
<PAGE> 4
VEW TELNET GMBH, DORTMUND
BALANCE SHEET
AS OF DECEMBER 31, 1998 AND 1997
(AMOUNTS IN THOUSANDS OF DEUTSCHE MARK)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
NO. IN NOTES 1998 1997
------------ ------------ ------------
DEM DEM
<S> <C> <C> <C>
ASSETS (1)
Fixed Assets:
Intangible Assets
Beneficial interests and similar rights............... 9,684 1,243
Prepayments on intangible assets...................... 62 329
------- -------
9,746 1,572
------- -------
Property, Plant and Equipment
Buildings on third party's land....................... 3,884 3,306
Telecommunication equipment........................... 44,987 12,659
Other equipment, furniture and fixtures............... 3,507 1,853
Prepayments and construction in progress.............. 15,415 21,465
------- -------
67,793 39,283
------- -------
Financial investments
Shares in subsidiaries................................ 2,501 495
Long-term loans to subsidiaries....................... 2,142 --
------- -------
4,643 495
------- -------
Total fixed assets.................................... 82,182 41,350
------- -------
Current Assets:
Inventories
Raw materials......................................... 1,568 141
Work in process....................................... 567 111
------- -------
2,135 252
Receivables and other assets (2)
Receivables trade..................................... 2,972 1,188
Receivables related parties........................... 2,355 1,212
Receivables subsidiaries.............................. 911 --
Receivables shareholder (BWS)......................... -- 498
Other................................................. 20 11
------- -------
6,258 2,909
Cash.................................................. (3) 752 315
------- -------
Total current assets.................................. 9,145 3,476
------- -------
Prepaid Assets............................................ -- 76
------- -------
Total Assets.......................................... 91,327 44,902
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Equity (4)
Capital stock........................................... 54,825 24,148
Additional paid-in capital.............................. 29,175 12,852
Accumulated deficit..................................... (70,753) (24,809)
------- -------
13,247 12,191
------- -------
Accrued Liabilities (5)
Accruals for pension obligations........................ 725 624
Other accrued liabilities............................... 20,444 7,263
------- -------
21,169 7,887
------- -------
Accounts payable (6)
Accounts payable to banks............................... 2,756 2,756
Accounts payable trade.................................. 6,810 7,638
Accounts payable to related parties..................... 46,605 13,841
Accounts payable to subsidiaries........................ 13 --
Other accounts payable.................................. 727 582
------- -------
56,911 24,817
------- -------
Deferred Credits.......................................... -- 7
------- -------
Total liabilities and shareholders' equity.............. 91,327 44,902
======= =======
</TABLE>
4
<PAGE> 5
VEW TELNET GMBH, DORTMUND
STATEMENT OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
(AMOUNTS IN THOUSANDS OF DEUTSCHE MARK)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
NO. IN NOTES 1998 1997
------------ ------------ ------------
DEM DEM
<S> <C> <C> <C>
Sales.................................................. (7) 17,799 4,304
Inventory increase of work in process.................. 456 (57)
Other capitalized own cost............................. (8) 2,699 1,358
Other income........................................... (9) 1,810 1,522
Material expenses...................................... (10) (32,051) (10,987)
Personnel expenses..................................... (11) (16,150) (7,726)
Depreciation and amortization.......................... (12) (8,892) (1,957)
Other operating expenses............................... (13) (9,816) (4,734)
Income from subsidiaries............................... (14) (85) --
Interest income and expenses........................... (15) (1,714) (348)
------- -------
Operating loss......................................... (45,944) (18,625)
Accumulated deficit previous year...................... (24,809) (6,184)
------- -------
Accumulated deficit.................................... (70,753) (24,809)
======= =======
</TABLE>
5
<PAGE> 6
VEW TELNET GMBH, DORTMUND
STATEMENT OF CASH-FLOWS FOR THE YEAR ENDED DECEMBER 31, 1998
(AMOUNTS IN THOUSANDS OF DEUTSCHE MARK)
<TABLE>
<CAPTION>
1998
-------
DEM
<S> <C>
Operating Loss.............................................. (45,944)
Depreciation on fixed assets................................ 9,550
Residual book value of disposals............................ 171
Capitalized own costs....................................... (2,699)
Net change in accruals for pensions......................... 79
Inventory increase of work in process....................... (456)
Other non-monetary expenses................................. 67
-------
Gross cash flow............................................. (39,232)
Gains resulting from the sale of fixed assets............... (208)
Increases in current assets
Raw materials............................................. (1,427)
Other..................................................... (3,343)
Increases of liabilities other liabilities and accruals..... 36,084
-------
Application of funds--operating............................. (8,126)
Cash payments received for sale of fixed assets............. 718
Payments for investments in
intangible assets......................................... (8,990)
property, plant and equipment............................. (24,849)
financial investments..................................... (5,316)
-------
Application of funds--investive............................. (38,437)
Increase in capital stock--payments by shareholders......... 47,000
-------
Source of funds--financing.................................. 47,000
Cash relevant changes of financial funds.................... 437
Cash on Jan 1st, 1998....................................... 315
-------
Cash on Dec 31st, 1998...................................... 752
=======
</TABLE>
6
<PAGE> 7
VEW TELNET GMBH, DORTMUND
NOTES TO FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS OF DEUTSCHE MARK)
The year-end financial statements of VEW Telnet were prepared according to
the requirements of the Commercial Law Code (HGB). The company voluntarily
adhered to the requirements for large corporations.
Our shareholder, VEW Energie AG, according to sec. 291 HGB, does not
publish combined financial statements as VEW Energie AG itself is consolidated
in the combined financial statements of VEW AG. The combined financial
statements of VEW AG which include VEW Telnet's financial statements are
available at VEW AG's headquarters in Dortmund.
ACCOUNTING PRINCIPLES
ASSETS
Intangible assets (purchased) have been capitalized at their cost minus
depreciation according to the straight-line method. The useful lives of
intangible assets are between 1 and 15 years.
Tangible assets are capitalized at cost minus depreciation. Subventions
were subtracted from the historical cost at the time they were received. Own
costs are capitalized according to the tax regulations with direct and indirect
material and personnel costs. The useful lives of the tangible assets are
according to tax regulations. Depreciation is as follows:
<TABLE>
<S> <C>
Buildings on third-party property......................... mainly straight-line method
Telecommunication equipment............................... straight-line method
Other..................................................... declining-balance method
</TABLE>
Goods purchased for less than DM 800 net are being written off in the year
of purchase according to sec. 6 II EstG. They are included in the accumulated
cost and the accumulated depreciation as an addition and as a subtraction.
Financial investments are shown at cost. A long-term installment due from a
subsidiary has been discounted at 5.5%.
Included in the inventories are raw materials which have been capitalized
at average costs according to the lower of cost or market principle. The work in
process is shown with direct costs.
Receivables and other assets are shown at their nominal values; there is an
allowance for doubtful accounts for the risk of loss.
LIABILITIES
Accrued liabilities were recorded at reasonable amount for all visible
risks and uncertain liabilities.
Accrued pension cost are recorded at their present value according to
sec. 6a EstG (income tax code) and were calculated by an actuary. For employees
delegated from the VEW group, the accrued pension cost of the VEW group company
have been transferred. The change in the accrual which is due to the new life
expectancy table (Richttafeln 1998) is shown in total in the 1998 year-end
financial statements which is not in accordance with tax regulations.
Liabilities are shown at their repayment value.
ADDITIONAL INFORMATION ON THE BALANCE SHEET
(1) FIXED ASSETS
Additions for intangible assets are mainly software and licenses. Additions
for tangible fixed assets are mainly for the deployment of telecommunication
equipment. The purchase in financial investments consist of a 40% share of
TeleBeL and a 5% share in BORnet. The long-term installment is a loan to TeleBel
which carries no interest.
7
<PAGE> 8
VEW TELNET GMBH, DORTMUND
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS IN THOUSANDS OF DEUTSCHE MARK)
(2) RECEIVABLES AND OTHER ASSETS
The receivables to related parties mainly consist of value added tax that
VEW AG has to pay to VEW Telnet as VEW Telnet and VEW AG are a tax unity.
Included in the other assets is a long-term receivable due in more than one year
of DEM 5 thousand.
(3) CASH
Almost all of the cash is cash in banks.
(4) EQUITY
After purchasing BWS' shares, VEW Energie is sole shareholder of VEW
Telnet:
<TABLE>
<CAPTION>
31-DEC-1998 31-DEC-1997
----------- -----------
DEM DEM
<S> <C> <C>
VEW Energie................................................. 54,825 20,885
BWS......................................................... 0 3,263
------ ------
54,825 24,148
------ ------
</TABLE>
The additional paid-in capital was increased by DEM 16,323 in 1998. It was
paid in by VEW Energie alone.
The deficit of 1998 was added to the accumulated deficit of the previous
year.
(5) ACCRUALS
Included in the accruals is part of the purchase price for the ISDN/IN-net
built by Nokia which was extended.
(6) ACCOUNTS PAYABLE
<TABLE>
<CAPTION>
DUE WITHIN DUE IN 1 TO
TOTAL 1 YEAR 5 YEARS 31-DEC-1997
------- ---------- ----------- -----------
DEM DEM DEM DEM
<S> <C> <C> <C> <C>
Accounts payable banks.......................... 2,756 0 2,756 2,756
Accounts payable trade.......................... 6,810 6,810 0 7,638
Accounts payable related parties................ 46,605 36,605 10,000 13,841
of which is VEW Energie....................... (46,116) (36,116) (10,000) (13,841)
Accounts payable subsidiaries................... 13 13 0 0
Other accounts payable.......................... 727 727 0 582
of which are taxes............................ (241) (241) (0) (232)
of which are social security.................. (384) (384) (0) (245)
------- ------- ------- -------
56,911 44,155 12,756 24,817
------- ------- ------- -------
</TABLE>
No liabilities are due in more than 5 years. There are there collaterals
for any of the liabilities.
8
<PAGE> 9
VEW TELNET GMBH, DORTMUND
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS IN THOUSANDS OF DEUTSCHE MARK)
ADDITIONAL INFORMATION ON THE STATEMENT OF INCOME
(7) SALES
<TABLE>
<CAPTION>
1998 1997
------ -----
DEM DEM
<S> <C> <C>
Telecommunication and other services for
Third parties............................................... 15,334 4,138
Related parties........................................... 1,579 166
Subsidiaries.............................................. 886 0
------ -----
17,799 4,304
------ -----
</TABLE>
(8) OTHER CAPITALIZED OWN COST
This item consists of wages and salaries only.
(9) OTHER INCOME
<TABLE>
<CAPTION>
1998 1997
----- -----
DEM DEM
<S> <C> <C>
Gains resulting from the sale of fixed assets............... 36 0
Gains resulting from the release of provisions.............. 4 41
Other....................................................... 1,770 1,481
----- -----
1,810 1,522
----- -----
</TABLE>
"Other" includes mainly sales of material and equipment to third parties.
(10) MATERIAL EXPENSES
<TABLE>
<CAPTION>
1998 1997
------ ------
DEM DEM
<S> <C> <C>
Expenses for materials and supplies......................... 2,815 1,645
Expenses for purchased services............................. 29,236 9,342
------ ------
32,051 10,987
------ ------
</TABLE>
The expenses for materials and supplies include the material used for
production, repair and for billing third parties.
The expenses for third-party services include services for production and
maintenance as well as the personnel and administration costs billed by VEW
Energie and BWS and the costs for using the net infrastructure provided by VEW
Energie.
(11) PERSONNEL EXPENSES
<TABLE>
<CAPTION>
1998 1997
------ -----
DEM DEM
<S> <C> <C>
Wages and salaries.......................................... 13,495 6,400
Social expenses............................................. 2,257 1,066
Expenses for social security................................ 398 260
------ -----
16,150 7,726
------ -----
</TABLE>
9
<PAGE> 10
VEW TELNET GMBH, DORTMUND
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS IN THOUSANDS OF DEUTSCHE MARK)
(12) DEPRECIATION AND AMORTIZATION
<TABLE>
<CAPTION>
1998 1997
----- -----
DEM DEM
<S> <C> <C>
Intangible and tangible fixed assets
straight-line method........................................ 6,991 926
declining-balance method.................................. 1,338 751
write-off of goods of immaterial value according to sec. 6
II EStG................................................ 563 280
----- -----
8,892 1,957
----- -----
</TABLE>
(13) OTHER OPERATING EXPENSES
<TABLE>
<CAPTION>
1998 1997
----- -----
DEM DEM
<S> <C> <C>
Other taxes................................................. 2 5
Write-off of accounts receivable and reserve for bad
debts....................................................... 71 0
Loss resulting from the disposal of fixed assets............ 0 2
Other....................................................... 9,743 4,727
----- -----
9,816 4,734
----- -----
</TABLE>
Other taxes have been included in "Other operating expense" for the first
time in 1998. In prior years the other taxes were included in "Taxes".
"Other" includes mainly rent expenses, advertising expenditure and charges
for employee classes.
(14) INCOME FROM SUBSIDIARIES
This item consists of the expenses from the proportionate loss absorption
from the DOKOM-Investment.
(15) INTEREST INCOME AND EXPENSES
<TABLE>
<CAPTION>
1998 OF WHICH RELATED 1997 OF WHICH RELATED
TOTAL PARTIES TOTAL PARTIES
------ ---------------- ----- ----------------
DEM DEM DEM DEM
<S> <C> <C> <C> <C>
Interest and similar income................... 11 8 21 21
Interest and similar expenses................. (1,725) (1,004) (369) (269)
------ ------ ---- ----
(1,714) (996) (348) (248)
------ ------ ---- ----
</TABLE>
SUPPLEMENTARY EXPLANATIONS
EMPLOYEES
VEW Telnet on average employed 127 employees in the reporting period, of
which 115 were employees and 12 were workers.
MANAGERS
Helmut Winkelmann, Dortmund
Rolf Rudiger Cichowski, Dortmund
Dr. Wandulf Kaufmann, Dortmund
The total amount of the management compensation amounted to DEM 668
thousand in 1998.
10
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VEW TELNET GMBH, DORTMUND
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS IN THOUSANDS OF DEUTSCHE MARK)
INVESTMENTS
<TABLE>
<CAPTION>
NAME AND REGISTRY OF SUBSIDIARY SHARE EQUITY 1998 NET INCOME 1997
- ------------------------------- ----- ----------- ---------------
% DEM DEM
<S> <C> <C> <C>
TeleBeL Gesellschaft fur Telekommunikation Bergisches Land
mbH, Wuppertal previously CityCom Wuppertal Multimedia
Gesellschaft mbH, Wuppertal............................. 40 --* (738)
RuhrNet Gesellschaft fur Telekommunikation mbH Schwerte,
Schwerte.................................................. 24 441 (59)
Dokom Gesellschaft fur Telekommunikation mbH, Dortmund.... 10 2773 (839)
BORnet GmbH, Stadtlohn.................................... 5 120 --**
</TABLE>
- ------------
* Value of 1997
** Company was founded in 1998
11
<PAGE> 12
ANNEX A
SUMMARY OF CERTAIN SIGNIFICANT DIFFERENCES
BETWEEN GERMAN GAAP AND U.S. GAAP
The audited financial information of VEW Telnet is prepared and presented
in accordance with German GAAP, which differs in certain significant respects
from U.S. GAAP. Certain significant differences between German GAAP and U.S.
GAAP relevant to the financial information are summarised below. Such summary
should not be considered exhaustive.
Furthermore, no attempt has been made to identify future differences
between German GAAP as applied by VEW Telnet and U.S. GAAP as applied by
VersaTel as the result of prescribed changes in accounting standards. Regulatory
bodies that promulgate German GAAP and U.S. GAAP have significant projects
ongoing that could affect future comparisons as this one. Finally, no attempt
has been made to identify all future differences between German GAAP and U.S.
GAAP that may affect the financial statements as a result of transactions or
events that may occur in the future.
PROPERTY, PLANT AND EQUIPMENT
Under German commercial code, low-valued assets costing less than DM 800
are expensed upon acquisition. A comparable specific rule does not exist in U.S.
GAAP. However, standard practice is to determine a 'capitalisation threshold'
depending on the size of the company; amounts over that threshold should be
capitalised, amounts under that threshold should be immediately expensed.
LEASES
The rules for capitalisation of lease objects differ between German
accounting principles and U.S. GAAP. According to German GAAP, accounting for
leases should closely follow tax regulations. A finance lease is assumed if the
basic lease term is less than 40% or more than 90% of the assets' useful life,
or if bargain purchase or renewal options have been agreed. Finance leased
assets and certain special leased assets must be accounted for by the lessee.
When applying U.S. GAAP, specific guidelines exist to classify leases as capital
(finance) or operating. A lease that transfers substantially all of the benefits
and risks of ownership of property should be accounted for by the lessee as the
acquisition of an asset and the incurrence of a liability, and by the lessor as
a sale and/or financing.
INVESTMENTS
Under German accounting principles, investments are valued at historic
acquisition costs. A write-down is only required for permanent diminutions in
value. According to U.S. GAAP investments in twenty- to fifty-percent-owned
corporate entities over which the investor can exhibit significant influence
(but not control) should be accounted for using the equity method (even when no
subsidiaries exist, which have to be consolidated).
PENSION ACCRUALS
According to German accounting principles, future increases in salaries are
disregarded in the pension accruals. When applying U.S. GAAP, projected benefit
obligations have to be stated, which take into consideration future increases in
salaries.
DEPRECIATION
Useful economic lifes in German financial statements could eventually be
influenced by tax issues. Furthermore, besides the straight-line method, the
declining balance method of depreciation could also be applied in German books.
12
<PAGE> 13
ITEM 6. EXHIBITS
The following exhibits are filed herewith:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
99.1 Press release, dated December 6, 1999, announcing the
acquisition of VEW Telnet.
</TABLE>
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on December 6, 1999.
VersaTel Telecom International N.V.
By: /s/ RAJ RAITHATHA
--------------------------------
Raj Raithatha
Chief Financial Officer
14
<PAGE> 1
EXHIBIT 99.1
PRESS RELEASE
[VERSATEL TELECOM LOGO]
NEWS BUSINESS
IMMEDIATE RELEASE
VERSATEL AGREES TO ACQUIRE VEW TELNET;
ENTERS LOCAL ACCESS MARKET IN GERMANY
AMSTERDAM, DECEMBER 6, 1999 -- VERSATEL TELECOM INTERNATIONAL N.V., a rapidly
growing, facilities-based, competitive provider of voice, data and Internet
services in Europe, today announced that it has entered into a binding
agreement to acquire 100 percent of the outstanding stock of VEW TELNET, a
wholly owned subsidiary of VEW ENERGIE AG, and a long term right to use the
fiber optic network of VEW TELNET, which is owned by VEW ENERGIE, for
approximately EUR 120 million. The closing of the acquisition is subject to
final Supervisory Board approval from both companies, which is anticipated to
occur in December.
The acquisition represents a key geographic expansion for VersaTel into the
Nord Rhein Westphalen (Northwest Rhein) region of Germany that is contiguous to
VersaTel's existing broadband network in the Benelux. The acquisition of VEW
TELNET is a logical extension of VersaTel's strategic focus due to similarly
high business concentrations and favorable demographics in VEW TELNET's market.
VersaTel will provide a full package of high bandwidth, local access services
in this expanded geographic region over VEW TELNET's approximately 1,400 km
fiber optic network.
VEW TELNET, with approximately 4,000 business customers and 225 employees, is a
leading regional telecommunications operator in the Westphalia-Lippe region of
Germany, including the heavily industrial eastern Ruhr District. This region
of Germany represents approximately 10 percent of the population of Germany,
and over 240,000 addressable business customers. For the year ended December
31, 1998, VEW TELNET had revenues of EUR 9.1 million. For the three months
ended September 30, 1999, VEW TELNET had annualized revenues of EUR 21.7
million.
<PAGE> 2
Upon completion of the acquisition, VersaTel will gain access to approximately
1,400 km of fiber optic network, primarily consisting of 18 fibers. The
backbone network consists of an STM 16 ring with over 160 SDH nodes/PoP
locations and 7 points of interconnection with Deutsche Telekom. To accelerate
local access fiber connections, VersaTel has secured the right to jointly build
with VEW ENERGIE by utilizing its power network rights-of-way, giving VersaTel
the ability to build additional fiber network and customer connections. In
addition, VEW TELNET is operational in 33 main distribution frame (MDF) or
central office (CO) locations, representing more than 10 percent of the
addressable market in the Westphalia-Lippe region.
VersaTel intends to expand VEW TELNET's access to Deutsche Telekom's MDF
locations in the region by extending VEW TELNET's existing network
(approximately 80 percent of the market is connected to the top 325 MDF sites).
VersaTel plans to leverage Deutsche Telekom's existing copper infrastructure to
deploy xDSL access, as well as build local access fiber connections, to provide
a full package of high bandwidth, local access services to German customers.
VersaTel intends to maintain a strong relationship with VEW ENERGIE after the
closing of the acquisition and will enter into a 12 month telecommunications
services contract. The acquisition agreement provides that VersaTel will have
the exclusive right to use VEW ENERGIE's existing and future telecom
infrastructure. In addition, the acquisition agreement provides that VEW
ENERGIE and VersaTel will assess the possibilities of cross-selling and product
bundling and VersaTel will be allowed to market its services to VEW ENERGIE's
power customers. VEW TELNET is also a member of RegioNet, a cooperation between
6 adjacent regional carriers to reduce termination costs and realize
interconnection synergies in Germany.
-END-
VersaTel Telecom International N.V. is a rapidly growing, facilities-based,
competitive local access network operator primarily focused on the Benelux,
which consists of The Netherlands, Belgium and Luxembourg, and is based in
Amsterdam. Founded in October 1995, the Company holds full telecommunications
licenses in Netherlands and Belgium and has over 20,000 business customers and
548 employees. VersaTel is currently building a broadband network that will use
the latest network technologies to provide business customers in the Benelux
with high bandwidth voice, data and Internet services. VersaTel is a publicly
traded company on the Amsterdam Stock Exchanges and Nasdaq National Market
under the symbol "VRSA". News and Information are available at
http://www.versatel.com.
VEW TELNET Gesellschaft fur Telekommumikation und Netzdienste GmbH,
headquartered in Dortmund, Germany, is a leading regional telecommunications
operator in the Westphalia-Lippe region of Germany. The company provides voice,
data and Internet services primarily to business customers utilizing its fiber
optic SDH local access network. VEW TELNET holds Class 3 and 4 licenses
allowing it to provide full infrastructure-based telecommunications services in
the Westphalia-Lippe region of Germany. This region represents more than 9
million inhabitants, approximately 10 percent of the population of Germany, and
over 240,000 addressable business customers. VEW ENERGIE AG founded VEW TELNET
in 1995 in order to leverage its telecommunications network as part of the
liberalization of the German telecommunications market.
<PAGE> 3
The company operates an approximately 1,400 km fiber optic network and has
approximately 225 employees and 4,000 business customers.
(Certain statements in this Press Release are "forward-looking statements"
within the meaning of The Private Securities Litigation Act of 1995. Such
statements are based on the current expectations of the management of VersaTel
Telecom International NV only, and are subject to a number of risk factors and
uncertainties, including but not limited to changes in technology and market
requirements, decline in demand for the company's products or services,
inability to timely develop and introduce new technologies, products and
services, loss of market share, pressure on pricing resulting from competition,
inability to maintain certain marketing and distribution arrangements, and
construction delays, which could cause the actual results or performance of the
company to differ materially from those described therein. For a more detailed
description of the risk factors and uncertainties affecting the company, refer
to the Company's reports to be filed from time to time with the Securities and
Exchange Commission.)
Note to Editors: The VersaTel logo is a registered trademark of VersaTel
Telecom International NV in The Netherlands, Belgium and Luxembourg.
Contacts:
Mark Lazar Anoeska van Leeuwen
Manager, Investor Relations Manager, Public Relations
VersaTel Telecom International NV VersaTel Telecom International NV
Tel: +31-20-750-1000 Tel: +31-20-750-1000
Rudi Gaidosch Ulf Hollinderbaeumer
Manager, Public Relations Manager, Public Relations
VEW ENERGIE VEW TELNET GmbH
Tel: +49-231-438-2342 Tel: +49-231-438-1897
