Iusacell in Loan Default

Mexico's Grupo Iusacell has said that it is in technical default on one of its loans. The company received a notice from lenders of the occurrence of two technical defaults under the US$266 million Amended and Restated Credit Agreement dated as of March 29, 2001.

The underlying defaults are due to the failure to obtain the consent of the lenders prior to the closing and opening of certain bank accounts and the failure to effect the registration of a mortgage on certain newly acquired assets within the time period specified in the Amended and Restated Credit Agreement. The Company has effected the registration of the mortgage today and has requested but has not yet received the consent of the lenders with respect to the bank accounts.

There can be no assurance that the Company will obtain the lenders consent.

Grupo Iusacell is a wireless cellular and PCS service provider in seven of Mexico's nine regions, including Mexico City, Guadalajara, Monterrey, Tijuana, Acapulco, Puebla, Leon and Merida. Iusacell is under the management and operating control of subsidiaries of Verizon Communications.

As of last November, the company's debt stood at about US$810 million, and is currently being renegotiated with its lenders."

Posted to the site on 1st April 2003