While the City of Burlington has not made public the details of any offers for Burlington Telecom, we do want to let folks know the basics of our offer. We have two reasons for this. One, we are currently raising capital through a Preferred Equity offering, and we thought it necessary to make this information known to potential investors. Additionally, we also think that the community will be able to better understand our offer the more they know. Here are the basics:

  • Headline price we are offering the City is $12 million
    • Sources of Funds
      • $10 million debt from Maine Fiber Company
      • Minimum of $1 million from Preferred Equity offering
        • Offering is open via Milk Money VT
        • Already raised roughly $250,000
      • $1.5 million of non-cash equity in the new company that we are offering the City of Burlington
        • This represents 12.5% of the new equity
    • Uses of Funds
      • $10.5 million in cash to pay off existing investors 12.5% ownership by City.
      • $500,000 injection into new company which is not counted towards the headline price of the deal
  • Ownership structure will primarily be a consumer-owned utility cooperative
  • Subscribers to Burlington Telecom will become member/owners
  • Existing management would all be asked to stay and run the resulting company

At this point we continue to meet with the City and City officials, and we assume that other parties who are bidding are doing the same. We know that there is a wide range in headline prices being offered to the City, but we think that our desire to turn Burlington Telecom into a consumer-owned cooperative provides significant additional community-equity to Burlington that is not captured in other offers. One of the key reasons for this is that, due to the structure of the Settlement, each dollar increase in amount of bid yields only an additional 25 cents for the City.

By : Alan Wagener /August 04, 2017 /Burlington Telecom Co-op News /0 Comment

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