MetroGas again extends consent solicitation, now ends July 18

New York, May 19 - MetroGas SA is extending its solicitation of consent from debt holders to restructure its debt using an acuerdo preventivo extrajudicial under Argentinean law to 5 p.m. ET on July 18 from 5 p.m. ET on May 18.

As of the old expiration date, the company received consent from holders of $77.34 million of the existing debt, down from $86.23 million as of 5 p.m. ET on May 2.

The Buenos Aires company is asking for powers of attorney authorizing an APE. Once approved, the APE is binding on all unsecured creditors, whether or not they participated.

MetroGas' solicitation applies to its 9 7/8% series A notes due 2003, its 7.35% series B notes due 2002 and its floating-rate series C notes due 2004 and its other unsecured financial debt, which is made up of bank debt.

The APE solicitation is subject to various conditions including the receipt of powers of attorney from and execution of support agreements by holders of at least 85% of the principal amount of its existing debt. The threshold can be lowered at MetroGas' option with a minimum of 66 2/3%.

Holders can choose either a cash option or a "modification" option.

Under the cash option, holders will receive cash at the rate of $0.50 per $1.00 or €0.50 per €1.00 or Ps. 0.50 per Ps. 1.00, depending on the currency in which the debt is denominated.

MetroGas will only buy up to the equivalent of $100 million principal amount under the cash option. Any excess will be reallocated pro rata to the modification option.

Also under the cash option, MetroGas will pay accrued interest at the rate of 2.5% from the date the APE is filed with the reviewing court to the settlement date.

Under the modification option, the principal amount of the existing debt will be increased to reflect capitalized interest at the rate of 2.5% from the date at which interest was last paid up to the settlement date. MetroGas will then repay principal on the modified debt in installments over nine years following settlement.

The modified debt will pay interest at 3% for the first two years, 4% for the third and fourth years, 5% for the fifth and sixth years and 6% to maturity.

Under the modification option, peso securities can be redenominated in dollars.

The information agent is GBR Information Services (212 644-1772) for international investors and JPMorgan Chase Bank, Sucursal Buenos Aires (4348-3475/4325-8046) in Argentina.

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