Virgin Media completes consent solicitations for Liberty Global merger; notes due 2021 fall short

By Jennifer Chiou

New York, Feb. 15 - Virgin Media Inc. announced that its subsidiary Virgin Media Finance has wrapped the consent solicitations for several series of notes after having received consents from holders of a majority of its dollar-denominated 8 3/8% senior notes due 2019 and sterling-denominated 8 7/8% senior notes due 2019.

The company's subsidiary, Virgin Media Secured Finance plc, also already took in the necessary consents for its dollar-denominated 6½% senior secured notes due 2018 and sterling-denominated 7% senior secured notes due 2018.

The solicitations were separate from the consent bid for Virgin Media Secured Finance's dollar-denominated 5¼% senior secured notes due 2021 and sterling-denominated 5½% senior secured notes due 2021, and Virgin Media did not meet the consent threshold for these notes.

The offers ended at 5 p.m. ET on Feb. 14.

As reported, consents were sought to amend the notes and waive provisions of the note indentures at the request of Liberty Global, Inc. and in order to facilitate the funding by Liberty Global in connection with the planned merger of the companies.

The adoption of the proposed amendments and the proposed waivers requires the consents of holders of a majority of the outstanding notes of each series voting as a single class.

As noted, the proposed amendments would change the definition of change of control to reflect the ownership of Virgin Media following the merger and modify change of control triggering events in the indentures.

The companies also are seeking consents to allow the ongoing reporting covenants to be satisfied through the provision of reports by a new U.K. public limited company, which will directly own Liberty Global and Virgin Media following the merger.

Consent payments

When the company announced the solicitations on Feb. 6, it offered holders who participated for the notes due 2018 or 2019 a cash payment of $5.00 per $1,000 principal amount of dollar-denominated notes and £5.00 per £1,000 principal amount of sterling-denominated notes.

The cash payment for the notes due 2021 was to be $20.00 per $1,000 principal amount or £20.00 per £1,000 principal amount.

The cash payment will be made in two installments: the first will be 25% of the cash payment for the proposed waivers, and the second will be the remaining 75% of the cash payment for the proposed amendments.

Virgin Media Finance said on Feb. 13 that it will make an initial cash payment of $3.75 per $1,000 aggregate principal amount of dollar-denominated notes due 2019 and £3.75 per £1,000 aggregate principal amount of sterling-denominated notes due 2019.

And Virgin Media Secured is set to pay $1.25 per $1,000 aggregate principal amount of dollar-denominated notes due 2018 and £1.25 per £1,000 aggregate principal amount of sterling-denominated notes due 2018.

The payments for the proposed waivers are to be made promptly after the offer ends. Payments for the proposed amendments will be made promptly after the completion of the merger.

Copies of the consent solicitation may be obtained from Lucid Issuer Services Ltd. (+44 0 20 7704 0880 or virginmedia@lucid-is.com). The solicitation agent was Credit Suisse Securities (+44 0 20 7883 8763 or 212 325 7596 or liability.management@credit-suisse.com).

Virgin Media is a New York-based entertainment communications company.

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