Multicanal APE debt exchange to include notes, notes/stock and cash options

By Caroline Salls

Pittsburgh, Sept. 6 - Multicanal SA will offer three options to exchange its 9¼% notes due 2002, 10½% notes due 2007, 10½% notes due 2018, 13 1/8% notes due 2009 and floating-rate notes due 2003 under its acuerdo preventivo extrajudicial, according to an F-4 filing with the Securities and Exchange Commission.

This offer is being extended only to holders of old notes that did not consent to the terms of the APE and/or tender their old notes in connection with an APE solicitation completed on Dec. 12, 2003 and U.S. retail holders that tendered old notes for the cash option by Dec. 12, 2003 under the terms of the APE cash option.

Those who are not U.S. retail holders, but who consented to the terms of our APE and/or tendered old notes by Dec. 12, 2003 may not participate in the exchange offer.

The company will issue $56.5 million of new 10-year notes, $85.8 million of new seven-year notes and 124.97 shares each of new class C and class D common stock in exchange for the old notes.

Holders of the old notes can elect to exchange the notes for:

* $1,050 principal amount of new 10-year notes per $1,000 principal amount of old notes;

* $440 principal amount of either 7% seven-year notes or seven-year floating-rate notes and 641 class C shares for each U.S.$1,000 principal amount of old notes; or

* $300 in cash for each $1,000 principal amount of old notes.

The APE became effective on Dec. 12, 2003.

According to the filing, the APE debt restructuring will allow Multicanal to reduce its outstanding bank and financial debt as of June 30 to.$224.7 million by buying back $125 million of the principal amount of the existing debt with a cash payment of $37.5 million plus interest; exchanging.$76.5 million principal amount of the existing debt for.$80.3 million of the 10-year notes and exchanging $324.9 million principal amount of the debt for $143.0 million of new seven-year notes and class C shares of common stock, representing 35% of the company's total capital on a fully diluted basis.

A maximum of $76.5 million can be exchanged under the first option; $324.9 million under the combined option and $131 million under the cash option.

At June 30, the company's $750.8 million in debt included $37.6 million of 10½% notes due 2018; $96.7 million of 9¼% notes due 2002; $98.8 million of 10½% notes due 2007; $130.8 million of 13 1/8% notes due 2009 and.$144.0 million of floating-rate notes due 2003.

Argentine cable television provider Multicanal is attempting to reorganize itself out of court in an extra-judicial proceeding known as acuerdo preventivo extrajudicial. It filed for relief under section 304 on Jan. 16, 2004 with the U.S. Bankruptcy Court for the Southern District of New York.

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