China VoIP & Digital Telecom gets default notice from Castlerigg

By Devika Patel

Knoxville, Tenn., June 30 - China VoIP & Digital Telecom Inc. received an event-of-default redemption notice from Castlerigg Master Investments Ltd., in regard to a Dec. 21 note financing, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

The company said in the filing that it received the notice on June 22. It had received earlier event-of-default redemption notices from Castlerigg in July and October, as previously reported.

Specifically, the notices claim the company is in default for failing to pay a redemption amount of $1.7 million by Dec. 30, 2008 and for failing to make interest payments for the calendar quarter ended March 31. It also failed to make a required share conversion after receiving a conversion notice.

The total amount of the default redemption was calculated as $66.7 million.

In the filing, the company said it would like to find an alternative way to resolve redemption without paying cash. It does not believe that any of the events constitute a default.

China VoIP & Digital Telecom, a voice-over-internet protocol company based in Jinan, China, said in the filing that it intends to contest these claims vigorously.

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