Transtel gets required consent for 12½% convertibles, convertible subordinated notes

By Jennifer Chiou

New York, May 2 - Transtel Tenderco, Ltd. announced it received the required consents in tender offers for any and all of parent Transtel SA's $144.586 million of 12½% senior secured convertible notes due 2008 and $41,521,759 accreted value of convertible subordinated notes due 2008 represented by 152,086 units.

The company said holders of at least 95% of each of the notes tendered their securities.

Each unit represents $1,000 of 12½% senior secured convertible notes due 2008, $205 initial accreted value convertible subordinated notes due 2008 and one shares trust certificate for 634,970 Transtel shares. The shares trust certificates will not be purchased in the tender offers.

The company solicited consents to amend the notes' indentures to waive and any all existing defaults; to eliminate all restrictive covenants and events of default; to terminate the mandatory sale process agreement related to the 12½% notes; to modify payment schedules for some intercompany notes due to Transtel and intercompany leases of telecommunications equipment; to assign rents due under intercompany leases to a new Transtel Colombian subsidiary; to reflect modified repayment schedules in the trust agreement for payments on intercompany agreements; to adopt shareholder approval to authorize the tenders and refinancing transactions; and to allow separation of the units into their component securities.

The required consents allow Transtel to execute a supplemental indenture.

After a mandatory $7.5 million prepayment on Dec. 31, $950.69 of each $1,000 original principal amount of 12½% notes is outstanding.

Assuming a May 15 closing, $205 initial accreted value of convertible subordinated notes will have an accreted value of $273.02.

The offers expire at midnight ET on May 12.

For each $1,000 principal amount of 12½% notes, the company will pay $950.69. For each $205 initial accreted value of convertible subordinated notes, the company will pay $60.00.

Those who tendered their holdings before 5 p.m. ET on April 28 will receive the $25.00 consent payment for the 12½% notes and $1.50 consent payment for the convertible subordinated notes, already included in the payout.

The offers are conditioned upon the receipt of tenders from holders of at least 90% of the 12½% notes, holders of at least 50% of the convertible subordinated notes, at least a majority of holders of shares trust certificates, the placement of new notes and the execution of supplemental indentures.

MacKenzie Partners, Inc. is the information agent (call collect 212 929-5550 or 800 322-2885). Morgan Stanley & Co. Inc. is the dealer manager and solicitation agent (call collect 212 761-1864 or 800 624-1808).

On Dec. 14, Transtel Tenderco terminated an earlier tender for Transtel's units because of failure to meet the funding condition for the tender and consent solicitation.

Based in Cali, Colombia, Transtel is a fixed-line private telecommunications company. The company began the offer on April 18.

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