Subsequent Events

Pending Ziggo Acquisition

Ziggo Merger Agreement

On January 27, 2014, we reached an agreement (the Ziggo Merger Agreement) on an offer to acquire all of the shares of Ziggo that we do not already own (the Ziggo Offer) in a stock and cash transaction. The supervisory and management boards of Ziggo have recommended that the shareholders of Ziggo accept the Ziggo Offer. Under the terms of the Ziggo Offer, Ziggo shareholders will receive (i) 0.2282 Class A ordinary shares of Liberty Global, (ii) 0.1674 Class C ordinary shares of Liberty Global (or 0.5630 Class C ordinary shares of Liberty Global after the completion of the 2014 Share Dividend, as defined and described below) and (iii) €11.00 ($15.17) in cash for each Ziggo share that they own (the Ziggo Offer Price). The completion of the Ziggo Offer is subject to customary closing conditions, including a minimum tender condition and receipt of competition clearances.

In addition to customary termination provisions, Liberty Global and Ziggo may terminate the Ziggo Merger Agreement in the event that an independent third party makes an offer which, in the reasonable opinion of the Ziggo supervisory and management board, is substantially more beneficial than our offer, exceeds the Ziggo Offer Price by 8% and is launched or is committed to be launched within eight weeks (a Competing Offer). On termination of the Ziggo Merger Agreement by Ziggo due to a material breach of the Ziggo Merger Agreement by our company, we will be obligated to pay to Ziggo a €69.5 million ($95.8 million) reverse termination fee. If the Ziggo Merger Agreement is terminated because the competition clearance is not obtained, we will be obligated to pay to Ziggo a €200.0 million ($275.8 million) reverse termination fee. On termination of the Ziggo Merger Agreement by our company due to (i) a material breach of the Ziggo Merger Agreement by Ziggo, (ii) a Competing Offer having been made or (iii) the revocation or amendment of the recommendation of the Ziggo board, other than circumstances linked to a decline in our share price, Ziggo will be obligated to pay us a €69.5 million termination fee.

Ziggo Financing Transactions

In connection with the signing of the Ziggo Merger Agreement, certain of our subsidiaries entered into the following financing agreements.

Ziggo Acquisition Facility. On January 27, 2014, LGE HoldCo VII B.V., (LGE HoldCo VII), our wholly-owned subsidiary, entered into a new senior facilities agreement (as amended and restated, the Ziggo Acquisition Facility), pursuant to which the lenders thereunder agreed to provide LGE HoldCo VII with (i) a euro-denominated term loan facility (the Ziggo Euro Facility) with an initial commitment of €434.0 million ($598.5 million) and a U.S. dollar-denominated term loan facility (the Ziggo USD Facility and, together with the Ziggo Euro Facility, the Ziggo Facility) with an initial commitment of zero and (iii) a multi-currency revolving facility in a total amount of €650.0 million ($896.3 million) (the Ziggo RCF). The lenders’ commitments may be increased with the prior consent of the lenders. The Ziggo Facility is repayable at maturity on January 15, 2022. The final maturity date of the Ziggo RCF is June 30, 2020.

All amounts borrowed under the Ziggo Facility shall be applied (i) towards financing a portion of the purchase price payable in relation to the acquisition of shares in Ziggo as contemplated by the Ziggo Merger Agreement and the repayment, redemption or refinancing of any financial indebtedness used directly or indirectly to acquire shares in Ziggo, (ii) towards financing any related original issue discount, fees, costs and expenses and (iii) for general corporate purposes. All amounts borrowed under the Ziggo RCF shall be applied for any of the foregoing purposes, as well as ongoing working capital requirements.

The interest rates payable are: (i) in respect of the Ziggo Euro Facility, the Margin (2.75% per annum subject to a leverage-based margin adjustment), plus EURIBOR (subject to a floor of 0.75% per annum), (ii) in respect of the Ziggo USD Facility, the Margin (2.50% per annum subject to a leverage-based margin adjustment), plus LIBOR (subject to a floor of 0.75% per annum) and (iii) in respect of the Ziggo RCF, the Margin (2.50% per annum subject to a leverage-based margin adjustment), plus EURIBOR (if euro-denominated) or LIBOR (if denominated in any other currency), in each case not subject to a floor. LGE HoldCo VII must also pay a commitment fee on any available but undrawn amounts under the Ziggo RCF at a per annum rate equal to 40% of the Margin on the Ziggo RCF.

The Ziggo Acquisition Facility will be guaranteed by each borrower and will be secured by (i) a first ranking share pledge over all of the issued and outstanding shares in LGE HoldCo VII, (ii) a pledge granted by the parent of LGE HoldCo VII in respect of any shareholder loans from such parent to LGE HoldCo VII and (iii) share security over certain subsidiaries.

The Ziggo Acquisition Facility requires the borrower group to maintain a senior net debt leverage ratio and a total net debt leverage ratio.

The Ziggo Acquisition Facility contains certain customary events of default, the occurrence of which, subject to certain exceptions and materiality qualifications, would allow the facility agent (on the instructions of the instructing group) to (among other things) (i) cancel the total commitments and/or (ii) declare that all or part of the outstanding loans be payable on demand.

The Ziggo Acquisition Facility restricts the ability of the members of the borrower group to, among other things, incur or guarantee certain financial indebtedness, make certain disposals and acquisitions or create certain security interests over their assets, in each case, subject to carve-outs from such limitations. The Ziggo Acquisition Facility also requires the borrowers to observe certain affirmative undertakings or covenants, which are subject to materiality and other customary and agreed exceptions.

Ziggo Bridge Facility. On January 27, 2014, LGE HoldCo VI B.V. (LGE HoldCo VI), our wholly-owned subsidiary and the immediate parent of LGE HoldCo VII, entered into a new bridge facility agreement (the Ziggo Bridge Facility), pursuant to which the lenders thereunder agreed to provide LGE HoldCo VI with a €934.0 million ($1,287.9 million) term loan facility. The lenders’ commitments may be increased with the prior consent of the lenders. Commitments under the Ziggo Bridge Facility are subject to cancellation in full or in part prior to the first utilization under certain circumstances.

The initial maturity date in respect of the loans under the Ziggo Bridge Facility is the first anniversary of the utilization date (the Initial Maturity Date). If certain conditions are met on the Initial Maturity Date, including the absence of any continuing default, the termination date of the loans under the Ziggo Bridge Facility will be extended to the date falling 84 months after the Initial Maturity Date.

The interest rate on each loan under the Ziggo Bridge Facility for each interest period is equal to the aggregate of (i) an increasing margin and (ii) EURIBOR (subject to a floor of 0.75% per annum). The interest rate is subject to an overall cap.

The Ziggo Bridge Facility will be secured by a first ranking pledge of shares to be granted by the immediate holding company of LGE HoldCo VI as of the first utilization date in relation to all of the issued and outstanding shares in LGE HoldCo VI.

The Ziggo Bridge Facility incorporates certain negative undertakings prior to the first utilization date. Following the initial utilization under the Ziggo Bridge Facility, the undertakings will no longer apply. The Ziggo Bridge Facility will not contain any financial maintenance covenants.

Share Dividend

On January 26, 2014, our board of directors approved a share dividend (the 2014 Share Dividend) of one Liberty Global Class C ordinary share on each outstanding Class A, Class B and Class C ordinary share as of the February 14, 2014 record date for the share dividend. The distribution date for the 2014 Share Dividend has been set as March 3, 2014. As the distribution date has not occurred as of the issuance date of these consolidated financial statements, the share and per share amounts in our consolidated financial statements have not been retroactively restated to reflect the 2014 Share Dividend.

VTR Group Financing Transactions

General. On January 24, 2014, we completed a reorganization of our credit pools. VTR GlobalCom and VTR Wireless were placed in a separate credit pool with their parent and one of our wholly-owned subsidiaries, VTR Finance B.V. (VTR Finance). In connection with the reorganization, all amounts outstanding under the VTR Wireless Bank Facility were repaid, VTR Finance and certain of its subsidiaries (including VTR GlobalCom) were extracted from the UPC Holding credit pool and VTR Finance and certain of its subsidiaries entered into the financing transactions described below. In connection with these transactions, we disclosed that we are exploring opportunities with respect to our Latin American operations (which include the VTR Group and Liberty Puerto Rico), including a possible spin-off of those operations to our shareholders. Our evaluation of such opportunities is at a preliminary stage, and any alternative pursued would be subject to approval by our board of directors. We are unable to predict the timing or terms of any spin-off or other transaction that might be pursued, or whether such a transaction will eventually occur.

VTR Senior Secured Notes. On January 24, 2014, VTR Finance issued $1.4 billion principal amount of 6.875% senior secured notes due January 15, 2024 (the VTR Senior Secured Notes) pursuant to an indenture dated January 24, 2014 (the VTR Indenture). The net proceeds from the issuance of the VTR Senior Secured Notes were used, together with existing cash of our subsidiaries, to repay all of the outstanding indebtedness under Facilities R, S and AE of the UPC Broadband Holding Bank Facility in connection with the extraction of VTR Finance and its subsidiaries from the UPC Holding credit pool.

Taking into account the derivative contracts that we entered into in connection with the VTR Senior Secured Notes, our effective borrowing cost for the VTR Senior Secured Notes is 10.95%.

The VTR Senior Secured Notes are senior obligations of VTR Finance and rank equally with all other existing and future debt of VTR Finance that is not subordinated in right of payment to the VTR Senior Secured Notes and senior in right of payment to all existing and future subordinated debt of VTR Finance. The VTR Senior Secured Notes will be secured by a first-ranking pledge over all the shares of VTR Finance and two of VTR Finance’s subsidiaries, United Chile LLC and UPC Chile Mobile Holding B.V.

At any time prior to January 15, 2019 VTR Finance may redeem some or all of the VTR Senior Secured Notes by paying a “make-whole” premium, which is the present value of all remaining scheduled interest payments to January 15, 2019 using the discount rate (as specified in the VTR Indenture) as of the applicable redemption date plus 50 basis points.

At any time prior to January 15, 2019, VTR Finance may redeem during each twelve-month period commencing on January 24, 2014 up to 10% of the principal amount of the VTR Senior Secured Notes at a redemption price equal to 103% of the principal amount thereof plus accrued and unpaid interest.

VTR Finance may redeem all or part of the VTR Senior Secured Notes at the following redemption prices (expressed as a percentage of the principal amount) plus accrued and unpaid interest and Additional Amounts (as defined in the VTR Indenture), if any, to the applicable redemption date, if redeemed during the twelve-month period commencing January 15 of the years set forth below:



Year		Redemption price

2019		103.438%
2020		102.292%
2021		101.146%
2022 and thereafter		100.000%

VTR Senior Credit Facility. On January 13, 2014, VTR GlobalCom, VTR Wireless and VTR Banda Ancha (Chile) SpA entered into a new $200.0 million senior secured revolving credit facility agreement with certain lenders (the VTR Senior Credit Facility), made up of a U.S. dollar facility (the VTR Dollar Senior Credit Facility) and a Chilean peso facility (the VTR CLP Senior Credit Facility). The interest rate for the VTR Dollar Senior Credit Facility is LIBOR plus a margin of 2.75%. The interest rate for the VTR CLP Senior Credit Facility is the applicable interbank offered rate for Chilean pesos in the relevant interbank market plus a margin per annum as agreed between the lenders under the VTR CLP Senior Credit Facility and VTR GlobalCom. Borrowings under the VTR Dollar Senior Credit Facility and the VTR CLP Senior Credit Facility mature in January 2020 and January 2019, respectively.