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Metromedia International in default on 10½% notes, agrees to waiver extension
By Caroline Salls
Pittsburgh, July 15 - Metromedia International Group, Inc. is in default on its 10½% senior notes because it did not file its form 10-K annual report for the fiscal year ended Dec. 31, 2004 with the Securities and Exchange Commission, according to a company news release.
The company also did not deliver its 10-K to the indenture trustee and the holders of the company's 10½ % senior notes due 2007 and failed to deliver other annual certificates to the indenture trustee.
Each was required to be delivered by July 15 under the notes indenture.
An event of default exists on the notes as of July 16, which permits the indenture trustee or holders of at least 25% of the notes outstanding to declare all notes due and payable immediately.
If this were to happen, the company would not have sufficient corporate cash available to meet this obligation, according to the release.
However, the company also announced that it has reached an agreement in principle with the holder of more than 80% of senior notes for an extension of the waiver of the defaults and event of default through Aug. 15, with a company option to extend the waiver through Sept. 15.
Under the waiver period, no event of default will exist on the company's failure to file the 2004 10-K with the SEC, deliver the 2004 10-K to the indenture trustee and the holders of the senior notes and deliver the certificates to the trustee.
Also, the notes cannot be declared due and immediately payable during the waiver period.
In exchange for the waiver, the company has committed to optionally redeem all of the outstanding senior notes using a portion of the proceeds from the pending sale of its interest in Peterstar ZAO.
Metromedia is a Charlotte, N.C., owner of communications and media businesses in Russia and Georgia.
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