Mexico's Iusacell Says Holders Seek Payment Of 2006 Notes

MEXICO CITY -(Dow Jones)- Mexican wireless phone operator Grupo Iusacell SA (CEL) said Wednesday that holders of its $350 million in 14.25% notes due December 2006 are demanding immediate payment since the company hasn't paid interest since June 2003.

In a press release, Iusacell said that the Bank of New York, acting as trustee, notified the company that an unspecified percentage of holders have requested acceleration of principal and accrued interest.

Mexican businessman Ricardo Salinas Pliego acquired Iusacell from Verizon Communications Inc. (VZ) and Vodafone Group PLC (VOD) of the U.K. in 2003, paying $7.4 million for a 74% stake and assuming about $800 million in debt.

Iusacell, Mexico's No. 3 wireless phone service provider, had 1.6 million subscribers at the end of the first quarter.

The company said in its first-quarter report on April 22 that it's continuing negotiations "with several of its creditors, seeking to obtain a comprehensive restructuring agreement as soon as possible."

The company defaulted on $150 million in 10% bonds that were due in July 2004. It also has syndicated bank debt.

-By Anthony Harrup, Dow Jones Newswires; (5255) 5080-3450; anthony.harrup@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 5th May 2005