Valentia, eircom receive consents for notes

New York, Feb. 23 - Valentia Telecommunications (Ba3/BB+) and eircom Funding said they received the necessary consents to amend the indentures of Valentia's €550 million 7¼% senior notes due 2013, eircom's €285 million 8¼% senior subordinated notes due 2013 and eircom's $250 million 8¼% senior subordinated notes due 2013.

The consents were received under the modified solicitation announced on Feb. 13.

On that date, the companies said that after discussions with certain noteholders they had revised the proposed amendments for which they are seeking consents in order to modify the tests used to calculate the amount of dividends and other payments Valentia may make following an initial public offering of equity securities of Valentia or its parent companies, and to modify the conditions which will need to be satisfied before such dividends or other payments may be made.

In addition, the companies increased the proposed consent payments to €20 for each €1,000 principal amount of euro-denominated senior notes, $20 for each $1,000 principal amount of dollar-denominated senior subordinated notes and €20 for each €1,000 principal amount of euro-denominated senior subordinated notes (up from the originally announced €2.50, $3.75 and €3.75, respectively).

The previously announced extended expiration deadline of 5 p.m. ET on Feb. 20 remained in effect, although it was subject to possible further extension.

Valentia, an Irish telecommunications company, and eircom said on Jan. 22 that they had begun the consent solicitation. The solicitation was originally supposed to expire at 5 p.m. ET on Feb. 4 but was subsequently extended.

They said that the proposed indenture amendments they are seeking consent for would give Valentia greater flexibility to pay dividends in the event of an initial public offering of its equity securities or to pay dividends or make other payments to its parent, Valentia Holdings Ltd., or another direct or indirect parent company of Valentia in order to fund the payment of dividends to the holders of the parent company's ordinary shares, preference shares or other capital stock in the event of an initial public offering of equity securities of Holdings or any other parent company.

Valentia added that although Holdings is considering an initial public offering, no decision has been made as of that time by the board of directors.

The companies said that the timing of any IPO would depend on market conditions and other factors.

The amendments are subject to consents from holders of a majority of the outstanding principal amount of the senior notes and the senior subordinated notes and completion by Valentia or any of its parent companies of its initial public offering of equity securities resulting in gross proceeds of at least €300 million. If such an IPO is not completed, no consent fees will be paid. Consent fees will be paid within five business days after completion of a qualifying IPO.

Valentia and eircom initially said that they would make consent payments of €2.50 for each €1,000 principal amount of senior notes, $3.75 for each $1,000 principal amount of dollar-denominated senior subordinated notes and €3.75 for each €1,000 principal amount of euro-denominated senior subordinated notes.

Goldman Sachs International (call +44 (0) 20 7774 9054, attention Credit Capital Markets or 800 828-3182, attention Credit Liability Management) and Citigroup (attention Liability Management Group at +44 (0) 20 7986 8969 or collect at 212 723-6106 or 800 558-3745) are solicitation agents. The tabulation agent is The Bank of New York (call 212 815-5788).

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