Iusacell Announcement
Thursday August 14, 6:39 pm ET
MEXICO CITY--(BUSINESS WIRE)--Aug. 14, 2003--Grupo Iusacell, S.A. de C.V. (BMV:CEL)(NYSE:CEL - News; "Iusacell" or the "Company") announced today that its subsidiary, Grupo Iusacell Celular, S.A. de C.V. ("Iusacell Celular") formally requested an additional extension of its temporary Amendment and Waiver (the "Amendment") of certain provisions and defaults under its US$266 million Amended and Restated Credit Agreement, dated as of March 29, 2001 (the "Credit Agreement"). The lenders under the Credit Agreement acknowledge receiving the Iusacell Celular request and are currently considering and evaluating the Company's request.
During the first half of 2003, Iusacell Celular exceeded the permitted leverage ratio under the Credit Agreement of 2.50. On April 28, 2003 Iusacell Celular and the lenders entered into a temporary amendment and waiver to the Credit Agreement to increase the permitted leverage ratio from 2.50 to 2.70. After receiving various extensions, on July 27, 2003, the amendment was further extended until August 14, 2003.
Upon expiration of the amendment and if the additional extension is not granted, an Event of Default (as defined in the Credit Agreement) will occur as if the Amendment had never been executed. Accordingly, the lenders under the Credit Agreement have the right to declare the indebtedness under their loan immediately due and payable.
Additionally, Iusacell previously publicly announced that, pending agreement with its lenders on a restructuring plan, Iusacell Celular did not made the US$7.5 million interest payment due on July 15, on Iusacell Celular's 10% bonds due 2004. The 30-day cure period to make the interest payment, before an event of default is declared has expired. As a result, an event of default has occurred under the Indenture governing the bonds, and the bondholders have the right to accelerate the principal of the bonds or take other legal actions, as specified in the Indenture, as they deem appropriate. |
