Telecom announces restructuring package

12 Jan 2004

Argentine incumbent Telecom Argentina has announced plans to restructure around USD3.2 billion of unsecured debt at its fixed line (USD2.63 billion) and mobile (USD590 million) divisions, both of which defaulted in June 2002. According to a spokesman for the PTO, the new plan stems from a deal struck in June 2003 in which Telecom bought back USD290 million of debt from creditors at a discount of 45%. In this latest agreement it is believed that creditors will benefit from significantly better terms, although the impact on creditors is difficult to measure given the different restructuring options available. Telecom’s fixed line arm is adopting the out of court restructuring framework known as APE which recently entered onto the statute books, and ultimately will require approval from creditors holding at least two thirds of its debt for the process to become a contract. The group’s mobile arm Personal is still exploring several options including APE.