AT&T Canada to start talks on restructuring debt

New York, June 10 - AT&T Canada Inc. said it will start talks with bondholders over the next several weeks in an attempt to achieve a consensual restructuring of its public debt.

The Toronto, Ont. company said it hopes to deleverage in order to enhance its "financial flexibility as it builds its competitive position."

As of March 31, 2002, AT&T Canada said it had $4.5 billion of publicly held debt, consisting of seven series of debentures.

"As we previously reported, AT&T Canada has the expertise, operating base and brand equity to be a successful provider of telecommunications services for the Canadian marketplace," said John McLennan, vice chairman and chief executive officer of AT&T Canada, in a news release. "To that end, we have been aggressively moving forward under a strategic process to position the company for the long term.

"This consists of having effective and efficient operations and a new capital structure with less debt that enables AT&T Canada to have the appropriate funding and financial flexibility to fuel the building of our business. In this connection, we have recently announced that the company had reached agreement with its bank syndicate for a restructured bank agreement. We now expect to work closely with the bondholders to reach a consensual agreement and we will be seeking the input of AT&T Corp.

"This is the next step in our plan to be a strong competitor and growing company in the long term. Over the past year, we have implemented a number of cost saving initiatives to build our business efficiencies and operating strength. We will compete aggressively in the Canadian telecom market and will continue to provide the highest quality service to our customers."

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