Iusacell Celular restructuring progressing; concurso mercantil declared by Mexican court

By Caroline Salls

Pittsburgh, Oct. 11 - Grupo Iusacell, SA de CV said the restructuring of the debt of operating subsidiary Grupo Iusacell Celular, SA de CV is progressing within the framework of its strategic plan and it expects the restructuring agreement in principle to be legally finalized soon.

In addition, a Mexican judge issued a declaration of concurso mercantil for Iusacell Celular on Wednesday, which the company said will allow it to enter a new phase toward completing its restructuring and to execute its plan of reorganization soon that will be submitted to the Mexican court.

According to a company news release, the restructuring includes $190 million of tranche A bank loans, $76 million of tranche B bank loans and $150 million of 10% senior notes due in 2004.

Iusacell said more than 82% of creditors have confirmed their support of its plan of reorganization by means of its exchange offer and consent solicitation that expired on July 26.

The restructuring consists of an exchange of the tranche A loans for new senior floating-rate first-lien notes due 2011 accruing interest at Libor plus 400 basis points and an exchange of the tranche B loans and its 2004 notes for new 10% senior subordinated second-lien notes due 2012.

Iusacell is a Mexico City cell phone company. It had an involuntary Chapter 11 case filed against it in the U.S. Bankruptcy Court for the Southern District of New York on July 14. Its Chapter 11 case number is 06-11599.

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