Mexico's Iusacell Reaches Agreement To Restructure Debt

MEXICO CITY -(Dow Jones)- Mexican wireless phone company Grupo Iusacell SA said Monday it has reached an agreement in principle with a majority of its creditors to restructure $766 million in debt.

Iusacell, controlled by businessman Ricardo Salinas Pliego, said it reached agreement with holders representing more than 51% of its of its $350 million of 14.25% notes due 2006, which it plans to swap for $175 million in 10% notes due December 2013, with six-monthly interest payments and amortization at maturity. Iusacell would have the option to capitalize up to 40% of the interest payments.

The new notes would be guaranteed by shares for the equivalent of 28%-34% of the company's equity.

Iusacell said it will seek approval to modify some of the terms and conditions of the 2006 notes, which it said has the approval of the majority of holders subject to certain conditions. When the swap is completed, the 2006 bonds will be canceled and about $150 million in unpaid accrued interest will be written off, the company added.

Iusacell said its main unit Grupo Iusacell Celular has reached a preliminary agreement to swap about $266 million in bank debt and $150 million in 10% notes due 2004.

Under that agreement, $190 million in bank debt would be exchanged for notes due 2010 paying four percentage points above Libor, with quarterly interest payments. The bonds would be guaranteed by the totality of the unit's assets.

Iusacell said the unit also plans to exchange $76 million in bank debt and the $150 million in 2004 notes for $203 million in 10% notes due 2011, with six-monthly interest payments of which the company may capitalize up to 30%. Unpaid interest on the 2004 notes, which stood at $44 million at the end of 2005, would also be written off.

Salinas Pliego, who also controls Mexican cell phone company Unefon SA, acquired 74% of Iusacell in 2003 for $7.4 million from Verizon Communications and Vodafone Group, assuming the debt in the process.

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

(END) Dow Jones Newswires "

Posted to the site on 23rd January 2006