UTStarcom extends, amends consent solicitation to waive default rights on 0.875% convertibles

By Jennifer Chiou

New York, Jan. 8 - UTStarcom, Inc. said it prolonged to 5 p.m. ET on Jan. 9 its consent solicitation for its 0.875% convertible subordinated notes due 2008 to waive the rights to pursue remedies available under the note indenture with respect to some defaults.

The solicitation was previously set to end at 5 p.m. ET on Jan. 5. It began on Dec. 22.

UTStarcom also modified the solicitation, providing that if it receives the necessary consents, it will pay an additional 6.75% per year in special interest from the date the proposed amendments become effective, unless the notes are earlier repurchased or converted.

UTStarcom will no longer pay a total fee of $5.492 million to holders who consent.

The Alameda, Calif., networking company already noted that it has not yet filed its 10-Q quarterly report for the period ended Sept. 30 with the Securities and Exchange Commission.

The trustee contends that the filing delay is a default under the indenture and has given UTStarcom a notice of default.

UTStarcom previously said that it believes that the notice of default is invalid and without merit, in part because the indenture does not specify a time period within which UTStarcom must file its report with the SEC.

However, UTStarcom is soliciting consents that will give it until May 31 to become current with its filings.

Citigroup Global Markets Inc. is solicitation agent (800 558-3745 or 212 723-6106). Global Bondholder Services Corp. is information agent (866 794-2200 or 212 430-3774).

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