MetroGas amends debt restructuring consent solicitation; now ends March 15

By Caroline Salls

Pittsburgh, Jan. 26 - MetroGas SA amended the terms of its solicitation of consents to restructure its debt and extended the solicitation to March 15 from Jan. 25, according to a 6-K filing with the Securities and Exchange Commission. This the fourth time the company has extended the solicitation.

MetroGas is seeking consents from holders of its 9 7/8% series A notes due 2003, 7 3/8% series B notes due 2002, floating-rate series C notes due 2004 and its other unsecured bank debt.

The solicitation extension will be used to allow the company to solicit consents from holders of existing debt in Italy, according to the filing.

Previously, the terms of the acuerdo preventivo extrajudicial (APE) solicitation said that if debtholders deliver consents but do not hold at least 95% of the existing debt, the company will restructure the debt by means of an APE.

Under the amended terms of the APE solicitation, the minimum percentage of existing debt held has been lowered to 92%.

If a majority of holders of between 92% and 98% of existing debt deliver consents, the company, at its option, will either restructure by means of an out-of-court restructuring or by means of a combination of out-of-court and APE restructuring.

If holders of a majority of more than 98% of the debt deliver consents, the company will restructure the existing debt by means of an out-of-court restructuring.

Also, previously debtholders could terminate their consent if the APE has not been executed by Feb. 15, but the solicitation was amended to give debtholders until April 30 to terminate their consent.

As of 5 p.m. ET on Tuesday, the company had received consents from holders of $391.2 million of the debt.

Debtholders can choose either a cash option or an exchange option.

Under the cash option, holders will receive cash at the rate of $750 per $1,000 of debt.

The Buenos Aires gas company will only buy up to the equivalent of $160 million principal amount under the cash option. Any excess will be reallocated pro rata to the exchange option.

Under the exchange option, holders can exchange their debt for 8% dollar-denominated series 1 notes due Dec. 31, 2014, at an amount of 100% of their debt or for 3% series 2 notes due Dec. 31, 2014, which can be dollar, euro or peso denominated, at an amount of 105% of the debt.

The 3% notes will step up to 8% after eight years.

The agent is JPMorgan Chase Bank (212 623-5136 or 212 623-6216) for international investors and JPMorgan Chase Bank, Sucursal Buenos Aires (4348-3475 or 4325-8046) in Argentina.

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