Magyar Telecom scheme sanctioned; recognition hearing set for Dec. 3

By Caroline Salls

Pittsburgh, Dec. 2 - Magyar Telecom BV said its scheme of arrangement was sanctioned by the High Court of Justice in England and Wales.

According to a company news release, 90.7% of existing senior secured notes due 2016 had been tendered in an exchange solicitation as of the solicitation expiration date, fulfilling one of the solicitation conditions.

Other conditions included receipt of a confirmation from Her Majesty's Revenue and Customs that the restructuring steps required to complete the exchange solicitation would not result in a corporate tax liability.

Based on discussions with Her Majesty's Revenue and Customs, the company had said it believed that this condition may not be fulfilled before a Nov. 29 longstop date.

As a result, Magyar said it intends to implement the restructuring under the scheme. The company said the restructuring consideration due to note creditors is identical regardless of whether the restructuring is implemented under the scheme or the exchange solicitation.

In addition, a foreign case recognition hearing will be held on Dec. 3 in the U.S. Bankruptcy Court for the Southern District of New York in connection with the company's Chapter 15 bankruptcy case.

London-based Magyar provides telecommunications services through its Budaors, Hungary-based subsidiary, Invitel. The company filed Chapter 15 bankruptcy on Oct. 29 under case number 13-13508.

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