Hungary’s Magyar Telecom (Invitel) has secured relief under Chapter 15 in the US and is therefore set to complete its financial restructuring.
Chapter 15 protects foreign companies from US creditor claims and lawsuits while they reorganise…
Hungary’s Magyar Telecom (Invitel) has secured relief under Chapter 15 in the US and is therefore set to complete its financial restructuring.
Chapter 15 protects foreign companies from US creditor claims and lawsuits while they reorganise abroad.
The Budapest-based telco now intends to carry out the restructuring. As such, eligible note creditors should receive their restructuring consideration or cash option entitlements today.
Magyar Telecom, controlled by Mid Europa Partners, entered into an agreement with holders of its €328.96m 9.5% senior secured notes due 2016 to carry out a financial restructuring aimed at cutting debt and generally improving the balance sheet.
At the time, the company said the agreement, subject to requisite approvals, would see €155m of the existing notes either retained or exchanged into new, reinstated notes. The remaining €174m in notes and accrued interest would be converted into 49% of the pro-forma, post-restructuring equity in the telco. Another €21m notes would be written off when the transaction closes.
In its statement today, Magyar Telecom said the coupon payment on the new notes is due on 15 December. The company intends to make payment the following business day, provided the notes have been listed on the Luxembourg Stock Exchange by then.
As equity sponsor, Mid Europa is set to invest €25m when the restructuring closes, specifically €15m in equity and €10m in debt. The firm will retain 51% of the pro-forma, post-restructuring equity in the group, subject to certain conditions.
