Alestra extends debt offer

13 Oct 2003

Mexican long-distance telco Alestra announced on Friday that it would extend its offer to restructure USD570 million of debt to October 17. The telco, which is 49%-owned by AT&T and 51% by joint venture Onexa, has already gained the support of 86% of its creditors to go ahead with the restructuring plan, and said that if the new announcement can push this figure up to 90%, it will be able to purchase old debts for 55% of face value or swap them for new bonds at 106% of the old bonds’ face value. In a bid to gain the creditors’ support, Alestra has threatened to enter into Chapter 11 bankruptcy if the number of creditors agreeing to the deal stays below 90%, a move which would force its remaining creditors to accept the agreement anyway. The telco, however, is facing strong opposition to its restructuring; last week it was revealed that bondholder Eximius Capital Funding had filed a request for bankruptcy against Alestra, while WRH Global Securities Pooled Trust has also filed a request to stop the debt offer.