Dynegy Jumps Puddle Into Euro Broadband, Predicts Strong Growth
Just three months after Houston-based Dynegy announced it would
enter the North American wholesale broadband communications
business, it now is storming into Europe with a deal to buy
London-based iaxis Ltd., a cash poor fiber optic network operator.
But Dynegy's growth won't be stopping at the water's edge. In
an all-day analysts' conference last week, Dynegy senior executives
laid out their strategies for future growth, saying they expect
earnings to grow 20% to 25% per year over the next three years
spurred by an asset-based growth plan.
Announcing its target range for 2001 recurring earnings
forecast, the company expects earnings per diluted share of $1.65
to $1.75, an increase of 25% to 30% from forecasts for 2000. The
company also said that its recurring EPS growth rate through 2003
would average 20% to 25%. Energy convergence is expected to grow by
30% to 40% a year, and liquids is expected to move upward 10% to
12%. Dynegy's transmission/distribution also is slated to grow by
5% to 10%.
The iaxis deal calls for Dynegy to pay a nominal amount for
shares of the company and then provide $40 million in payments to
iaxis creditors who will receive 40% of their claims against the
company. Dynegy also will invest another $160 million to extend
iaxis' network. The London company is owned by iaxis NV, a Dutch
venture capital holding company that owns and operates an
8,750-mile (14,000-kilometer), 10-gigabit fiber optic network
throughout Europe. The network has 40 hub sites.
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