Telecom Argentina Announces the Closing of Its Debt Restructuring
24 August 2005 - 11:30AM
PR Newswire (US)
BUENOS AIRES, Argentina, Aug. 23 /PRNewswire-FirstCall/ -- Telecom
Argentina S.A. (BASE: TECO2, NYSE: TEO) ("Telecom Argentina" or the
"Company") announced today that it intends to close its debt
restructuring process by issuing the Notes and paying the cash
consideration on August 31, 2005 (the "Issuance Date"), in exchange
for the Outstanding Debt, in accordance with the terms of the
Acuerdo Preventivo Extrajudicial entered into by Telecom Argentina
and its financial creditors (the "APE"). The APE was homologated by
the Argentine Court on May 26, 2005, decision that became final on
June 10, 2005. Moreover, the period for non-consenting creditors to
elect any of the options offered by the APE expired on July 4,
2005, date as of which the APE can be implemented. On the Issuance
Date, Telecom Argentina will comply with the terms of the APE, by
paying the following concepts: 1. Cash payment to Holders of
Outstanding Debt that have elected Option C (as defined in the
APE), equivalent to 85% of the Principal Face Amount of their
Outstanding Debt, payable in US Dollars, or its equivalent in Pesos
for Argentine Residents, at the prevailing foreign exchange rate at
the Issuance Date. 2. Cash Payment to Holders of Outstanding Debt
that have elected Option B (as defined in the APE), and that in
accordance to the APE will receive in cash 31.875% of the Principal
Face Amount of their Outstanding Debt (equivalent to 85% of 37.5%
allocated from Option B to Option C, as defined in the APE),
payable in US Dollars, or its equivalent in Pesos for Argentine
Residents, at the prevailing foreign exchange rate at the Issuance
Date. 3. Delivery of the Notes, in accordance to the Option elected
in the APE by each Holder of Outstanding Debt, or Option A for
non-consenting creditors, as contemplated in the APE. 4. Interest
Payments for the period commencing on January 1, 2004 and ending
August 31, 2005, based on the nominal amount of Notes to be
received in accordance to point 3 above, and in accordance to the
following interest rates: Notes to be received in Annual Interest
Equivalent Rate accordance to the option Rate for the period
elected by each holder January 1,2004 through of Outstanding Debt
August 31,2005 Option A in Pesos 3.23% 5.3715% Option A in US
Dollars 5.53% 9.2167% Option A in Euros 4.83% 8.0324% Option A in
Yen 1.93% 3.2096% Option B in US Dollars 9.00% 15.0000% 5. Interest
Payments for the period commencing on January 1, 2004 and ending
August 31, 2005, on the cash received as described in points 1 and
2 in accordance to the following interest rates: Cash to be
received in Annual Equivalent Rate for accordance to the option
Interest Rate the period January 1, elected by each holder 2004
through of Outstanding Debt August 31,2005 Option C in US Dollars
2.28% 3.7938% Interest described in points 4 and 5, will be
calculated as described in the APE, and in accordance to the option
elected by each holder of Outstanding Debt, or Option A for those
non-consenting creditors (as stated in the APE). Furthermore,
Telecom Argentina announces that on Issuance Date, it will make the
following payments under the Notes: (i) The principal amortization
payments with scheduled payment dates of October 15, 2004 and April
15, 2005 (as described in the APE), in accordance to following
percentages of original principal amount of the Notes: Series
Scheduled Payment Dates Percentage of original principal amount A
October 15, 2004 3.20% April 15, 2005 2.80% TOTAL 6.00% B October
15, 2004 4.00% April 15, 2005 5.00% TOTAL 9.00% The principal
amortization payments will be made in cash, in the currency in
which each Series is denominated (Pesos, Euros, US Dollars, and
Yen). Holders of Notes denominated in foreign currency that are
residents in Argentina, will receive payments in pesos at the
prevailing foreign exchange rate as of the Issuance Date. (ii) the
cash amounts reserved but not applied pursuant to Option C (as
defined in the APE), which will be applied as a Note Payment (as
defined in the Notes). (iii) A Note Payment (as defined in the
Notes). Payments described in clauses (ii) and (iii) will result in
the payment in whole of the principal amortization payments
scheduled for October 15, 2005, April 15, 2006, October 15, 2006,
April 15, 2007, and October 15, 2007. The principal amortization
payments denominated as a percentage of the original principal
amount of the Notes are as follows: Series Scheduled Payment Dates
Percentage of original principal amount A October 15, 2005 2.80%
April 15, 2006 2.40% October 15, 2006 2.40% April 15, 2007 0.80%
October 15, 2007 0.80% TOTAL 9.20% Series Percentage of original
principal Scheduled Payment Dates amount B October 15, 2005 5.00%
April 15, 2006 6.00% October 15, 2006 6.00% April 15, 2007 7.00%
October 15, 2007 7.00% TOTAL 31.00% The principal amortization
payments will be made in cash, in the currency in which each Series
is denominated (Pesos, Euros, US Dollars, and Yen). Holders of
Notes denominated in foreign currency that are residents in
Argentina, will receive payments in pesos at the prevailing foreign
exchange rate as of the Issuance Date. The Note Payments indicated
in clauses (ii) and (iii) will result in a reduction of Excess Cash
amounts payable under the Notes on the next Mandatory Prepayment
Date (as defined in the Notes). Payment shall be made to the
holders of the Notes held in global form through the settlement
systems of DTC, Euroclear and Clearstream, as applicable. If you
are an Argentine resident and you have questions regarding your
payments, please contact Banco Rio de la Plata S.A. domiciled at
Bartolome Mitre 480, Ciudad de Buenos Aires (Tel: 54-11-4341-1000),
who has been appointed as paying agent in Argentina. Payments to
holders of Notes in certificated form will be made by wire transfer
to the accounts of the respective holders. This press release does
not constitute an offer to sell or a solicitation of an offer to
buy the notes referred to herein. Notes issued outside the United
States to non-U.S. persons will not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), as
amended, and may not offered or sold in the United States absent
registration or applicable exemption from the registration
requirements of the Securities Act. The notes offered to U.S.
holders pursuant to the restructuring were offered pursuant to
registration statement filed with the U.S. Securities and Exchange
Commission. The notes are being issued by Telecom solely in
connection with the settlement of its debt restructuring
transaction referred to above. Telecom Argentina is a company
incorporated under the laws of Argentina with its registered office
at Alicia Moreau de Justo 50, Piso 10, C1107AAB, Buenos Aires,
Argentina. Telecom Argentina is one of Argentina's largest
telecommunications operators. It provides local and long-distance
telephony, mobile communications (through its subsidiary Telecom
Personal), data and Internet access services in Argentina. It also
operates a mobile license in Paraguay through one of its
subsidiaries. Telecom Argentina common stock is listed on the
Buenos Aires Stock Exchange under the ticker "TECO2" and Telecom
Argentina ADSs are listed on the New York Stock Exchange under the
ticker "TEO". Disclaimer: This document may contain statements that
could constitute forward-looking statements. Forward-looking
statements may be identified by words such as "believes,"
"expects," "anticipates," "projects," "intends," "should," "seeks,"
"estimates," "future" or other similar expressions. Forward-looking
statements involve risks and uncertainties that could significantly
affect Telecom Argentina's expected results. The risks and
uncertainties include, but are not limited to, the risks and
uncertainties disclosed under the caption "Risk Factors" in the
registrations statement on Form F-1 (File No. 333-111790) in
Amendment No. 2 to the registration statement (filed with the SEC
on June 21, 2004), and in any additional amendments to such
registration statement. Readers are cautioned not to place undue
reliance on forward-looking statements, which speak only as of the
date of this document. Telecom Argentina undertakes no obligation
to release publicly the results of any revisions to forward-looking
statements which may be made to reflect events and circumstances
after the date of this press release, including, without
limitation, changes in Telecom Argentina's business or to reflect
the occurrence of unanticipated events. Readers are encouraged to
consult Telecom Argentina's registration statement on Form F-1 as
well as periodic filings made on Form 6-K, which are filed with or
furnished to the SEC. DATASOURCE: Telecom Argentina S.A. CONTACT:
Pedro Insussarry, +54-11-4968-3743, or Moira Colombo,
+54-11-4968-3627, or Gaston Urbina, +54-11-4968-3628, all of
Telecom Argentina; or Carlos Medina of Morgan Stanley & Co.
Incorporated, +1-212-761-6520; or Diego Steverlynck of MBA Banco de
Inversiones S.A., +54-11-4319-5865
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