Polska Telefonia receives tenders of 72.97% of 10 7/8% notes by consent deadline

New York, Oct. 14 - Polska Telefonia Cyfrowa Sp. zoo said its PTC International Finance II SA subsidiary received tenders of 72.97% of its €135.62 million outstanding 10 7/8% senior subordinated guaranteed notes by the consent deadline.

On Sept. 28 Polska Telefonia said PTC International Finance had begun a cash tender offer for all its €135.62 million 10 7/8% notes because of a new tax treaty.

The company is also soliciting consents to amend the note indenture to eliminate most of the restrictive covenants, certain events of default and certain additional covenants and rights. Holders who tender will be deemed to have consented to the amendments.

Polska Telefonia also said it plans to redeem its $150 million 11¼% senior subordinated guaranteed notes due 2009 and €300 million 11¼% senior subordinated guaranteed notes due 2009 on their first call date of Dec. 1. The price will be 105.625.

For 10 7/8% notes tendered by the consent deadline of 5 p.m. ET on Oct. 13, the company will pay €1,075.00 per €1,000 principal amount. After that date and before the expiration date of 12:01 a.m. ET on Oct. 28 the company will pay €1,060.00 per €1,000 principal amount.

Holders will also receive accrued interest up to but excluding the settlement date.

Polska Telefonia said it is making the tender offer in response to a new tax treaty between Poland and the Netherlands under which payments by Polish entities on funds borrowed from Dutch entities are subject to a 5% withholding tax in Poland. PTC International Finance II loaned the proceeds to PTC International Finance (Holdings) BV, a Dutch company, which in turn loaned the proceeds to Polska Telefonia. There is a grace period under the new treaty to Jan. 1, 2005.

Polska Telefonia said it believes that it has the right to redeem the notes at par because of the new tax but said it recognizes such an action would be "economically disadvantageous" to noteholders and consequently is carrying out the tender offer while reserving the right to exercise the tax redemption.

The tender is subject to at least a majority of the principal amount of the notes being tendered.

The dealer manager is Dresdner Bank AG London Branch (Contact Carlyle Peake at +44 20 7475-3688).

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