Ntelos misses coupon payments on notes, starts talks on debt restructuring

By Carlise Newman

Chicago, Feb. 18 - Ntelos Inc. said it will not make the coupon payments of $18.2 million and $6.4 million due Feb. 18 on its 13% and 13.5% subordinated notes.

The Waynesboro, Va.-based wireless service provider added that it has begun talks with holders of its debt on a comprehensive restructuring plan.

Ntelos has a 30-day grace period to make the interest payments before a default occurs, according to a news release.

The company said it does not have enough funds to make the interest payments on the notes without borrowing under its credit agreement; however it has sufficient cash reserves and cash flow to continue normal business operations during the 30-day grace period.

As previously announced, Ntelos entered into an amendment and waiver with its bank group Nov. 29, 2002, regarding its $100 million revolving credit facility. The waiver, which expired Feb. 1, 2003, provided that the company would not be required to make certain representations and warranties in connection with a borrowing request. Ntelos is now required to comply with all provisions of the credit agreement for borrowings to be available.

Ntelos has hired UBS Warburg to advise on its capital structure.

Ntelos' chief executive officer James Quarforth said the company is making progress in discussions with debtholders, including a steering committee of secured bank lenders and holders of a substantial percentage of outstanding notes, in developing a comprehensive financial restructuring plan.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.