Cable & Wireless begins consent bid for $400 million 8¾% notes due 2020

By Susanna Moon

Chicago, Nov. 7 – Cable & Wireless Communications plc said subsidiary Sable International Finance Ltd. is soliciting consents from holders of its $400 million 8¾% senior secured notes due 2020.

The consent solicitation will end at 5 p.m. ET on Nov. 19.

The solicitation is in connection with the company’s proposed acquisition of Columbus International Inc., a privately owned company based in Barbados, and its subsidiaries, according to a company press release.

The company said it agreed to purchase the target group for $1.85 billion and assume the group’s debt, which was $1.14 billion as of June 30.

Specifically, the company is soliciting consents to amend the notes to

• Permit Cable & Wireless and its subsidiaries to incur debt represented by the Columbus group’s debt on the date of the proposed acquisition and any debt of the target group that refinances the acquired Columbus debt, in either case, without requiring compliance with the leverage ratios in the notes indenture or any member of the target group to be a guarantor;

• Exclude from the definition in the notes indenture of non-guarantor debt any acquired Columbus debt or refinanced Columbus debt, which means that, for purposes of testing the capacity to incur debt (including to fund the proposed acquisition) secured by collateral, neither acquired Columbus debt nor refinanced Columbus debt will be included in calculating the consolidated senior secured/non-guarantor leverage ratio for purposes of the definition of permitted collateral liens.

A related modification to the definition of consolidated net income in the notes indenture would exclude net income of members of the Columbus group from the calculation of consolidated net income, except to the extent that dividends or similar distributions have been paid to any subsidiaries that are not themselves members of the target group (for as long as that acquired Columbus debt or refinanced Columbus debt remains outstanding); and

• Permit the incurrence by a Cable & Wireless subsidiary that is neither the company nor a guarantor, prior to the closing of the proposed acquisition, of the debt required to fund the proposed acquisition, the proceeds of which would be placed in escrow pending the closing of the proposed acquisition and secured in favor of the lenders providing the debt.

The company said it is treating the proposals as a single request for consents and will pay an aggregate cash payment of $2 million payable to the holders, on a pro rata basis, who have delivered consents to the proposals.

The minimum pro rata consent payment per $1,000 principal amount of notes will be $5.00, assuming all holders consent.

If the company fails to secure the needed consents, the proposed amendments will not go through and no payments will be made. In that case, the company intends to effect the proposed acquisition by way of a holding company acquisition, the release noted.

The solicitation is conditioned on the company securing consents for a majority of the outstanding notes.

J.P. Morgan Securities LLC (866 846-2874 or 212 834-7279) is the solicitation agent, and Lucid Issuer Services Ltd. (+44 0 20 7704 0880) is the tabulation agent.

The issuer is a Bracknell, England-based telecommunications company.

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