Virgin Media holders exchange 85% 6.5% notes so far as part of merger

By Toni Weeks

San Luis Obispo, Calif., July 1 - Virgin Media Inc. announced that as of close of business last Friday, holders of $853.9 million of 6.5% convertible senior notes due 2016 had elected to convert their notes in connection with the fundamental change caused by the plan of merger between Virgin Media, Liberty Global, Inc. and Liberty Global plc. The principal amount of notes converted so far represents more than 85% of the originally issued notes, according to a press release.

Following the conversion of these notes, there are about $145.1 million principal amount of convertible notes outstanding.

Under the plan of merger agreement, Liberty Global agreed to issue and deliver its class A ordinary shares and class C ordinary shares to fulfill the conversion obligation of Virgin Media.

Holders of the 6.5% convertibles have the right to exchange their notes for 13.8302 Liberty Global class A shares, 10.3271 Liberty Global class C shares and $937.37 in cash for each $1,000 principal amount of notes exchanged during the make-whole exchange period, which is from June 7 until 5 p.m. ET on July 9.

Holders who elect to convert their notes after the make-whole exchange period will receive 13.4339 Liberty Global class A ordinary shares, 10.0312 Liberty Global class C ordinary shares and $910.51 in cash per $1,000 of notes.

On June 28, Liberty Global's class A ordinary shares closed at $73.49 each, and the company's class C shares closed at $67.89 each. Based on these prices, the total value of the make-whole consideration currently is roughly $2,655 per $1,000 principal amount, according to the press release.

Under the indenture for the notes, Virgin Media has the option to settle any conversion in the form of the merger consideration, as described, cash or a combination. The company has elected to settle all conversions to date in merger consideration. Thus for the convertible notes that have been exchanged in connection with the fundamental change, Liberty Global has issued or will issue 11.8 million class A shares and 8.8 million class C shares, and Virgin Media has paid or will pay $800.4 million in cash, not including cash in lieu of fractional shares.

The Bank of New York Mellon is the trustee.

Virgin Media is a New York-based entertainment communications company.

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