Operator Kosc offers a few weeks of reprieve

The next few weeks will be decisive for Kosc, who is in great financial difficulty, and who is playing its survival. Heard by the Senate, Yann de Prince confirmed the existence of sixteen candidates at the time for the operator.

The alternative wholesale operator Kosc, which was to be established when it was created in 2016 as the answer to the quasi-duopoly of Orange and SFR in the corporate telecom market, is in the hot seat. Heard at the beginning of October by the Senate , its president, Yann de Prince, confirmed that there are only a few weeks left to his leadership to find a way out of his financial problems. Otherwise, the alternative wholesale operator could be sold or simply liquidated. 

“The company has not yet reached the operating balance, so in principle can not convince the court of its ability to continue its business, the logic commanded that we proceed, not a cessation of payment, but outright liquidation, “explained the president of the operator wholesale-only , indicating having” taken alone the initiative of a different scheme, to preserve the social interest of the company by enrolling in a legal framework “.

“The process that I initiated opens the company a very short period of two months to try to overcome its difficulties,” said the leader, who in early September commissioned the Rothschild investment bank to ” find investors or any partners who could help save or take over the business. “

“The outcome of the process initiated at the beginning of September is set for the end of October 2019. It can be extended for two months, its main condition being the payment of future salaries.This payment itself depends on a new commitment by shareholders or the lifting of foreclosures of SFR.If one or the other does not realize, we will probably avoid the pitfall of liquidation, “said the president of Kosc.

SFR claims 21 million euros to Kosc

The operator, which recorded a turnover of 18 million euros in 2018 and still expected recently revenues of around 100 million euros in 2021, is indeed plagued by serious problems of cash flow and has seen its horizon darken considerably in recent weeks.

In fact, the uncertainty weighs on the operator after an unfavorable decision of the Competition Authority concerning the takeover of the Completel DSL network, previously held by SFR, and the withdrawal of one of its major investors (outside OVH), the Bank of the Territories, a branch of the Caisse des Dépôts. 

As a reminder, SFR is now challenging the terms and conditions of the sale of its Completel network in Kosc, which made the Autorité de la concurrence a condition sine qua non for the acquisition between SFR and Altice-Numéricable in October 2014. L The operator chaired by Alain Weill today would claim 21 million euros to Kosc, who contests this sum and estimates its damage to 65 million euros.

“KOSC is at this time in a blocking situation”

“KOSC is at this time in a situation of blockage On 27 September 2019, instrumentalizing the decision of the ADLC in full process of discussion with creditors, SFR has indeed made a seizure of accounts and all receivables from the company, KOSC thus no longer has any liquidity.

Bailiffs come regularly to our premises. From the end of October, it will be confronted with the problem of the payment of wages except additional intervention of our shareholders, “said Denis Basque, the director of financial control and regulatory affairs of the operator.

Bouygues Telecom and Iliad candidates to buy Kosc?

The time is now in the emergency for the Kosc staff. “The situation in Kosc is simple today: in the coming weeks, the shareholders will be sufficiently convinced and will decide to provide sufficient funds allowing the company to regain some leeway, necessary for the establishment of ‘a perennial solution, the company will be liquidated or sold,’ said his president, during a hearing held on October 8 before the Senate business delegation.

Especially since one of its historical investors, OVH, for whom telecom activities are no longer a priority, could play the girl of the air. A bad deal for the operator, while the Romanian company holds 40% of the capital of the company, estimated by Yann de Prince to 23 million euros, but today accounts for 90% of Kosc’s turnover.

Still, the operator does not lack pretenders for its recovery. “Despite a most unfavorable situation, despite the urgency in which these potential partners are being asked to position themselves, sixteen [candidates] have already made themselves known”, said the President of the ‘operator. And to specify that it is mainly of industrial partners.

Two operators have views on this juicy market

Six of them, among the most well-known operators except Orange and SFR, have put forward offers of principle, some of which value the company significantly “.

Bouygues Telecom and Iliad could therefore be candidates for the takeover of the alternative wholesale operator, which holds a 2% stake in the corporate telecom market.

If this information is still to be taken conditional, it might seem plausible as both operators have views on this lucrative market, whose total turnover in 2017 was 9.2 billion euros according to the Arcep, which is still a game preserve for the almost exclusive benefit of Orange, which has the hand on about 70% of the shares of this market, against about 20% for the dedicated branch of SFR. Contacted, the two operators did not respond to our requests at the time when these lines were written.

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