Impsat reaches agreement on debt restructuring

New York, March 11 - Impsat Fiber Networks, Inc. said it has reached agreements with several of its largest vendors and bondholders on a restructuring plan to reduce the Buenos Aires, Argentina telecommunications company's debt by $680 million.

The agreements, which are non-binding, are likely to be followed by a prepackaged Chapter 11 filing during the first half of this year.

Under the plan, holders of Impsat's senior guaranteed notes due 2003 would receive $67 million of new senior guaranteed notes, initially convertible into 23% of the company's new common stock. Holders of its senior notes due 2005 and 2008 would exchange them for 98% of the company's new common stock. Holders of debt under Impsat's broadband network vendor financing agreements would receive $141 million of senior secured indebtedness, $23 million of new senior guaranteed notes initially convertible into 5% of the company's new common stock and warrants to acquire 15% of the company's new common stock.

Existing stockholders will receive nothing.

"We are gratified to have obtained this level of support from our creditors. Our operations continue to develop successfully in the region despite the overall economic downturn, and this agreement shows the confidence financial investors have in our story. This restructuring will significantly strengthen Impsat and allow it to sustain its leadership in the region," said Ricardo Verdaguer, Impsat chief executive officer, in a news release.

Completion of the restructuring is subject to various conditions, including Impsat obtaining additional creditor support.

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