GTS - GLOBAL TELESYSTEMS - ebone.
There is nothing there. Bonds quoted at 8c. Stock suspended on EASDAQ (and on NYSE). Worth zilch.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
GTS bondholders seen accepting debt plan
By Richard Lindsay
LONDON, June 1 (Reuters) - Bondholders are expected to accept Global Telesystems Europe's (NYSE:GTS - news) plans to rid itself of debt and not pay the next instalment of interest on its bonds, bankers said on Friday.
The firm said in a statement it would start talks next week with holders of its public debt and preferred securities on recapitalising its balance sheet to reduce its 1.65 billion euro debt burden and 158 million euro annual interest bill.
GTS, which owns Europe's largest fibre-optic network, also said that subsidiary GTS Europe BV would not make interest payments totalling 27 million euros due on Friday on the 2009 bond and a 225 million euro 10.5 percent bond maturing in December 2006.
The company has a one month grace period, however, and will not be in default until July 1.
Investors said the firm would probably be given a rough ride but ultimately bondholders have few options.
``GTS thinks, perhaps correctly, that it needs to divest debt to get back into the European network game. Unfortunately that looks like it is going to leave some debt investors holding equity they don't want,'' said one investor.
The company's shares were suspended on Nasdaq Europe and the New York Stock Exchange on Friday following its announcement.
GTS's 275 million euro 11 percent bond due December 2009 was quoted at eight percent of face value at 1400 GMT on Friday, down from 23 percent on Thursday.
Duncan Lewis, GTS president and chief operating officer, said on Wednesday that the firm was looking at options like a debt for equity swap to reduce its debt mountain.
Lewis has already overseen a similar deal for the company's Esprit unit which saw bondholders receive 90 percent of that division's equity.
``On the face of it, debt for equity is not a bad idea, especially as you would be looking for a premium on equity to compensate for being moved into a risk profile you didn't buy,'' said Toby Nangle of Barings Asset Management.
A spokesman for GTS confirmed to Reuters that the company is formalising arrangements to meet bondholders next week.
The spokesman also said that at two public investor meetings last week GTS had been approached by bondholders suggesting that the firm repeat the Esprit transaction on a wider scale.
``They came to us and suggested that we put cash into the core business rather than interest repayments. Obviously they want something in return but we have a good relationship here,'' he said.
The company's core business is called Ebone -- a 22,431 km (13,940 mile) network.
|
