Moody's may raise Bell Canada senior unsecured rtg
Reuters, 06.05.02, 12:29 PM ET
(Full text of press release provided by Moody's Investors Service).
Approximately C$160 million of Debt Affected.
NEW YORK, June 5 - Moody's Investors Service placed the senior unsecured and issuer ratings of Bell Canada International Inc. ("BCI"), currently Ca, under review for possible upgrade. The Company recently announced the pending sale of its interest in Telecom Americas Limited to America Movil for US$366 million in cash and short-term notes, as well as the release of US$250 million of guarantees relating to Telecom Americas issued by BCI. This transaction and BCI's remaining assets may provide sufficient funding to fully repay BCI's bank loans, notes and guarantees, although this is dependent on the outcome of several pending lawsuits against BCI. If the sale is approved by shareholders and noteholders, closing is scheduled to occur on or before August 9, 2002, at which time the bank loan will be repaid and cancelled. BCI's assets would consist of approximately C$100 million of cash, C$340 million of notes due from America Movil in March 2003, 76% of Canbras, a Brazilian cable operator, and 28% of Axtel, a Mexican fixed wireless operator. BCI's liabilities would consist of C$160 million of notes and an approximate C$50 million guarantee of debt of the Vesper companies, Brazilian competitive local exchange carriers.Additionally, BCI was sued in April 2002 for C$285 million by several holders of its' convertible debentures which matured February 2002 and also provided an indemnity related to a US$70 million lawsuit in Colombia. The recovery on BCI's notes will depend on resolution of the lawsuits and guarantee. The Company is seeking a court-supervised Plan of Arrangement to expedite the winding up of BCI, including resolution of the outstanding lawsuits. As part of this process, BCI has asked that a court-directed Monitor supervise the Company. The review will be dependent on the successful closing of the transaction and will evaluate developments, positive and/or negative, with respect to the convertible debenture and Colombia lawsuits and the Vesper guarantee. Debt affected by this action: C$160 million 11% senior unsecured notes due September, 29, 2004. The notes are redeemable by BCI at any time, priced on a yield to maturity basis. Bell Canada International Inc. is a holding company for Latin American wireless and cable investments, and it is headquartered in Montreal, Quebec, Canada.
Copyright 2002, Reuters News Service
forbes.com |
