Alestra to be blocked from debt offer

23 Sep 2003

Mexico’s third largest long-distance carrier, AT&T-owned Alestra, is likely to be blocked from buying back or exchanging more than USD570 million in defaulted debt. The revelation comes after one of its debt holders, W.R.H. Global Securities Pooled Trust, filed a suit in the Manhattan federal court to block the exchange offer from going ahead. The company claimed that Alestra had deliberately mis-represented some of the facts surrounding the offer; it had offered to buy back its 12 1/8% notes maturing in 2006 and 12 5/8% bonds due in 2009 at a price of 55 cents to the dollar, with a cap of USD110 million. Alestra entered the Mexican long-distance market in 1997 when it was opened up to competition but entered into financial difficulties after it failed to attract enough customers to keep up with interest payments.