Magyar Telecom gets approval for scheme of arrangement; exchange solicitation set to end

By Jennifer Chiou

New York, Nov. 27 - Magyar Telecom BV announced that it obtained approval for its previously announced scheme of arrangement at its meeting of creditors.

As reported, the company extended the exchange solicitation for its senior secured notes due 2016 to noon ET on Nov. 28 from 8:30 a.m. ET on Nov. 26.

At the meeting, 89.22% by value of note creditors voted and, of those voting, 99.81% by value voted in favor of the scheme of arrangement.

As previously noted, Magyar said the scheme of arrangement is tied to its proposed financial restructuring, which is based on a July 15 agreement. Under an agreement, holders of more than 70% of the company's notes said they would support the restructuring via a scheme of arrangement or an exchange solicitation.

As of the close of business on Nov. 26, the company had received tender instructions from holders of €290,164,000, or 88.21%, of the notes, just shy of the 90% threshold needed to implement the exchange solicitation.

The company said in its latest press release that if it does not receive valid tenders from holders of 90% or more of the notes in the exchange, it intends to implement the restructuring by means of the scheme of arrangement.

In that case, the final hearing to sanction the scheme of arrangement would take place on Nov. 29 in London.

Magyar said it would notify holders of the time and court.

In a prior press release, Magyar said it was urging those who submitted their custody instructions but have not delivered their account holder letter to do so.

As reported, Magyar said that it obtained the consents for amendments and waivers to its 9½% notes, which were needed to facilitate its planned restructuring. The consent solicitation began Sept. 9.

The company said on Sept. 9 that holders of more than 70% of its €328.96 million of net total outstanding 9½% notes consented to its July 15 restructuring agreement.

The noteholder group agreed to support the restructuring and not take any enforcement action in connection with the company's failure to make a June 15 interest payment for a period that enables the restructuring to be implemented.

Magyar Telecom said the restructuring was expected to be completed before the "long-stop date" of Nov. 29.

London-based Magyar provides telecommunications services through its Budaors, Hungary-based subsidiary, Invitel.

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