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SEC Filings

10-K405
RENAISSANCE MEDIA GROUP LLC filed this Form 10-K405 on 03/31/1999
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           RENAISSANCE MEDIA HOLDINGS LLC AND RENAISSANCE MEDIA LLC
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
                               December 31, 1997
contemplated financing (see note 4). Subsequent to the closing of the
acquisition, these costs will be amortized over periods ranging from 8 to 15
years.
 
3. Time Warner Asset Purchase Agreement
 
   On November 14, 1997, Holdings entered into an Asset Purchase Agreement
(the "Time Warner Asset Purchase Agreement") with TWI Cable whereby Holdings
agreed to purchase from TWI Cable the assets of certain cable television
systems in Louisiana, Tennessee and Mississippi (the "Acquisition"). This
transaction closed on April 9, 1998 and was accounted for using the purchase
method. The purchase price for the assets acquired was $309.5 million, $300
million of which was paid in cash and $9.5 million of which was paid by the
issuance of an equity interest (9,500 units) in Holdings to TWI Cable at the
closing. The 9,500 units issued to TWI Cable as equity represent an 8.8%
interest in Holdings, determined by dividing the TWI Cable interest of 9,500
units by the total units outstanding of Holdings of 108,500. TWI Cable's
interest in Holdings is as a minority member with one Board representative,
and TWI Cable has economic interests in Holdings equal to its ownership
percentage on the same basis as all other members of Holdings. Holdings was
formed to consummate the Acquisition and had no assets prior to this
transaction. In accordance with the Limited Liability Company Agreement of
Holdings, TWI Cable is not required to make any future equity contribution to
Holdings and its ability to sell or otherwise dispose of its interests in
Holdings is limited. In accordance with the Time Warner Asset Purchase
Agreement, Holdings made a deposit payment of $15 million on December 5, 1997
which was held by an escrow agent until the closing date. (See Note 9.)
 
4. Capitalization and Debt Financing
 
   In accordance with a commitment letter dated November 14, 1997, Morgan
Stanley Senior Funding, Inc. has committed to provide up to $200 million of
acquisition debt financing to Media ("Acquisition Debt"), including $25
million available to Media, if necessary, to fund capital expansion and
upgrade programs as well as for general working capital requirements. (See
Note 9.)
 
5. Interest Rate Cap Agreement
 
   On December 5, 1997, Media purchased an interest rate cap agreement from
Morgan Stanley Capital Services Inc. At December 31, 1997, the interest rate
cap agreement effectively fixed or set a maximum interest rate of 7.25% on
bank debt borrowings up to $100 million. The interest rate cap agreement
expires on December 5, 1999. The cost of this agreement has been recorded as
deferred financing costs and is being amortized to interest expense ratably
over the life of the agreement.
 
6. Due to Management Investors
 
   Subsequent to the formation of the Company and the execution of the Time
Warner Asset Purchase Agreement, the Management Investors advanced $1 million
to Holdings. At the closing of the Time Warner Asset Purchase Agreement, (see
Note 9), this advance will be contributed by the Management Investors to
Holdings as equity.
 
7. Commitments
 
   Media entered into a lease agreement on January 5, 1998 for corporate
office headquarters. The lease agreement expires on January 4, 1999. Annual
rental expense for 1998 under the agreement will be $90,000.
 
 
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