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KPN Raises $3.78 Billion as Dutch Phone Operator Cuts Net Debt

May 15 (Bloomberg) -- Royal KPN NV, the Dutch phone operator partly owned by Carlos Slim’s America Movil SAB, raised about 2.92 billion euros ($3.78 billion) in a share sale as investors took up 97.4 percent of the offered rights.

The 74.9 million shares that have not been subscribed were offered for sale today, KPN said in a statement. The company, based in The Hague, set out to raise 3 billion euros by offering 2.84 billion shares at 1.06 euros each. KPN received enough demand for all the offered shares, which were priced at 1.75 euros apiece, the company said in a statement today.

The phone operator needs to strengthen its balance sheet after spending 1.35 billion euros on wireless spectrum to increase network speed for customers using smartphones for surfing the Web, downloading music and watching videos. KPN has scrapped dividends planned for 2013 and 2014. The company said last month that the rights issue would allow it to invest in operations and cut net debt.

KPN shares rose as much as 2.7 percent to 1.77 euros in Amsterdam today. The stock was up 1 percent at 11:48 a.m. local time, paring its decline this year to 23 percent.

‘Some Relief’

“With virtually all of the rights having been subscribed, there may be some relief that the company has successfully raised its targeted proceeds,” analysts at Banco Espirito Santo SA said in a note on KPN to clients earlier today.

Investors were entitled to buy two offered shares for each share right they held, KPN said on April 25. The rights offer started April 26 and ended yesterday.

The share sale was fully underwritten by a syndicate of banks led by Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co., ABN AMRO Group NV, ING Groep NV and Rabobank Groep were bookrunners and BNP Paribas SA, Credit Suisse Group AG, Societe Generale SA and UniCredit SpA acted as lead managers.

To contact the reporters on this story: Ruth David in London at rdavid9@bloomberg.net; Maud van Gaal in Amsterdam at mvangaal@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Jacqueline Simmons at jackiem@bloomberg.net

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