Telecom Argentina Announces It Has Paid The Ape Consideration and Closed Its Debt Restructuring
August 31 2005 - 9:46PM
PR Newswire (US)
BUENOS AIRES, Argentina, Aug. 31 /PRNewswire-FirstCall/ -- Telecom
Argentina S.A. (BASE: TECO2, NYSE: TEO) ("Telecom Argentina" or the
"Company") announced today, August 31, 2005 (the "Issuance Date"),
that it successfully completed its debt restructuring process by
issuing the new Notes and paying the cash consideration in exchange
for the Outstanding Debt, in accordance with the terms of the
Acuerdo Preventivo Extrajudicial entered into by Telecom Argentina
and its financial creditors (the "APE"), resulting in the
extinguishment of all Outstanding Debt pursuant to the APE. The
Company also made prepayments on the new Notes issued pursuant to
the APE, further strengthening it post-restructuring debt profile,
as described in more detail below. "We are very pleased to be
concluding the debt restructuring process of Telecom Argentina
under an agreement that was endorsed by almost all of our
creditors. We greatly appreciate the support received from our
creditors throughout the restructuring process. With this
restructuring and with cash flow generation of the Company we were
able to reduce significantly our level of indebtedness. Moreover,
we were able to obtain a conservative profile of maturities and we
have considerably improved our credit ratios. We believe that the
restructuring will give Telecom Argentina a firm foundation to
continue expanding its business in the Argentine telecommunications
market," said Carlos Felices, Chief Executive Officer of Telecom
Argentina. Today, the Company issued to its creditors the Series A
and Series B Notes. Telecom Argentina also paid its creditors cash
pursuant to the terms of the APE and made certain additional cash
payments under the terms of the new Notes. As a result of the
payments and prepayments of the new Notes, the principal
amortization payments due up to and including October 15, 2007 have
been prepaid. These payments and prepayments, which represent 15.2%
of the original principal amount of the Series A Notes and 40.0% of
the original principal amount of the Series B Notes, have been
allocated among the new Notes in accordance with the amortization
schedule described in the new Notes. Payments to the holders of new
Notes issued in global form were made through the settlement
systems of DTC, Euroclear and Clearstream, as applicable. Payments
to holders of new Notes issued in certificated form were made by
wire transfer to the accounts of the respective holders. Pursuant
to the terms of the APE, non-participating creditors are entitled
to receive consideration in the form of Series A Notes and cash
consideration under Option A. The consideration payable to such
holders has been issued and is available for collection by the
holders, together with the payments made on the Series A Notes
issued to those holders, by following the collection procedures
detailed in the restructuring section of the Company's website. Set
forth below is summary information regarding the consideration paid
by the Company on the Issuance Date: 1. The Company issued Series A
Notes in the following currencies and original principal amounts:
approximately P$26 million (including CER adjustment),
approximately US$105 million, approximately euro 534 million and
approximately 12,328 million yen. Additionally, the Company paid to
creditors who received consideration under Option A interest
payments for the period January 1, 2004 through August 31, 2005
(based on the nominal amount of Series A Notes) at the following
annual rates: 3.23% for Peso Notes, 5.53% for Dollar Notes, 4.83%
for Euro Notes and 1.93% for Yen Notes, amounting to a payment of
approximately P$1 million, US$10 million, euro 43 million and 396
million yen, respectively. 2. The Company issued approximately
US$999 million of Series B Notes under Option B. Additionally, the
Company paid creditors who received consideration under Option B
interest for the period January 1, 2004 through August 31, 2005
(based on the nominal amount of Series B Notes) at an annual rate
of 9.00%, amounting to a payment of approximately US$150 million.
3. The Company paid an aggregate amount equal to US$565 million to
creditors who selected or were allocated into Option C.
Additionally, the Company paid creditors who received consideration
under Option C interest on the Option C for the period January 1,
2004 through August 31, 2005 at an annual rate of 2.28%, amounting
to a payment of approximately US$21 million. 4. The Company made
payments of approximately P$4 million, US$416 million, euro 81
million and 1,874 million yen under the terms of the new Notes
issued pursuant to the APE consisting of: a. The mandatory
principal amortization payments scheduled for October 15, 2004 and
April 15, 2005. b. The cash amounts reserved but not applied
pursuant to Option C under the APE and an additional principal
prepayment, that will be applied as a Note Payment and will cover
the principal amortization payments under the new Notes up to and
including October 15, 2007. The amount to be issued and the
remaining outstanding principal amount of new Notes, after giving
effect to the payments and prepayments described above, are
detailed in Annex 1. The interest and principal amortization
payments on the new Notes were made in the currency in which each
Series is denominated (Pesos, Euros, US Dollars or Yen), except to
residents in Argentina, to whom all payments were made in Argentine
pesos, at the prevailing Foreign Exchange rates as of the Issuance
Date. Payments of Option C cash and interest on Option C cash were
made in US Dollars, except to residents in Argentina, to whom
payments were made in Argentine Pesos at the prevailing Foreign
Exchange rates as of the Issuance Date. Set forth in Annex 2 is an
analysis of the amounts paid to creditors per 1,000 equivalent of
Principal Face Amount of Outstanding Debt. For additional
information please contact: Telecom Argentina Pedro Insussarry
(54-11) 4968-3743 Moira Colombo (54-11) 4968-3627 Gaston Urbina
(54-11) 4968-3628 Morgan Stanley & Co. Incorporated MBA Banco
de Inversiones S.A. Carlos Medina Diego Steverlynck (1-212)
761-6520 (54-11) 4319-5865 This press release does not constitute
an offer to sell or a solicitation of an offer to buy the notes
referred to herein. Notes issued outside the United States to
non-U.S. persons will not be registered under the Securities Act of
1933, as amended (the "Securities Act"), and may not be offered or
sold in the United States absent registration or applicable
exemption from the registration requirements of the Securities Act.
The notes offered to U.S. holders pursuant to the restructuring
were offered pursuant to a registration statement filed with the
U.S. Securities and Exchange Commission. The notes are being issued
by the Company solely in connection with the settlement of its debt
restructuring transaction referred to above. Telecom Argentina is a
company incorporated under the laws of Argentina with its
registered office at Alicia Moreau de Justo 50, Piso 10, C1107AAB,
Buenos Aires, Argentina. Telecom Argentina is one of Argentina's
largest telecommunications operators. It provides local and
long-distance telephony, mobile communications (through its
subsidiary Telecom Personal), data and Internet access services in
Argentina. It also operates a mobile license in Paraguay through
one of its subsidiaries. Telecom Argentina's common stock is listed
on the Buenos Aires Stock Exchange under the ticker "TECO2" and
Telecom Argentina's ADSs are listed on the New York Stock Exchange
under the ticker "TEO". Disclaimer: This document may contain
statements that could constitute forward-looking statements.
Forward-looking statements may be identified by words such as
"believes," "expects," "anticipates," "projects," "intends,"
"should," "seeks," "estimates," "future" or other similar
expressions. Forward-looking statements involve risks and
uncertainties that could significantly affect Telecom Argentina's
expected results. The risks and uncertainties include, but are not
limited to, the risks and uncertainties disclosed under the caption
"Risk Factors" in the Company's Annual Report on Form 20-F for the
year ended December 31, 2004. Readers are cautioned not to place
undue reliance on forward-looking statements, which speak only as
of the date of this document. Telecom Argentina undertakes no
obligation to release publicly the results of any revisions to
forward-looking statements which may be made to reflect events and
circumstances after the date of this press release, including,
without limitation, changes in Telecom Argentina's business or to
reflect the occurrence of unanticipated events. Readers are
encouraged to consult Telecom Argentina's annual report on Form
20-F as well as periodic filings submitted on Form 6-K, which are
filed with or furnished to the SEC. DATASOURCE: Telecom Argentina
CONTACT: Pedro Insussarry, +54-11-4968-3743, Moira Colombo,
+54-11-4968-3627, both of Telecom Argentina
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