ONO announces prices for note tender offer

Grupo Corporativo ONO, SA said on Thursday that it had determined the prices it will pay for five series of dollar- and euro-denominated notes under its previously announced tender offers for those notes.

The purchase price for each series of notes has been set at $320 per $1,000 principal amount tendered, or €320 per €1,000 - the maximum of the previously announced price range - in order to let ONO purchase the largest aggregate principal amount of notes possible up to €140 million. The company said that based on this purchase price the total cash cost (including accrued interest and early tender payment amounts) of purchasing the notes tendered below the purchase price is €78.4 million. In addition, ONO has €61.6 million of cash available to purchase notes at the purchase price.

As of Dec.4 - the early tender and price determination deadline - €34.87 million and $40.02 million aggregate principal amount of euro and dollar notes, respectively, had been tendered at the purchase price. Breaking that down, as of the deadline, $35.006 million of ONO's dollar-denominated 13% notes due 2009 had been tendered at the selected purchase price, and $93.039 below the purchase price. Some $5.015 million of the 14% notes due 2011 had been tendered at the purchase price, and $68.291 million below the purchase price.

Among the euro-denominated issues, ONO said that €19.050 million of the 13% notes due 2009 had been tendered at the purchase price by the deadline, while €7.262 million had been tendered below the purchase price. €6 million of the 14% notes due 2010 were tendered at the purchase price, and €31.38 million were tendered below the purchase price. And €9.82 million of the 14% notes due 2011 had been tendered at the purchase price, and €16.965 million were tendered below the price. ONO said that withdrawal rights have now been terminated.

ONO said that as of the now-passed early tender and price determination date, the condition mandating tender of at least €10 million of each note series has been satisfied, while other previously announced conditions have not been satisfied. Negotiations with the senior bank credit facility lenders are ongoing.

The dealer manger for the offer is UBS Warburg Ltd. (call collect at 203 719- 8035 or toll free at 800 722-9555, extension 8035 in the U.S. or +44 207 568 7132 in the U.K). JP Morgan Chase is acting as the depositary and tender agent. The U.S. information agent is D.F. King & Co. (call collect in the U.S. at 212 269- 5550 or toll-free at 800758-5880, in the U.K. call +44 207 7920 9700). The Bank of New York (Luxembourg) SA is acting as the information agent in Luxembourg.

AS PREVIOUSLY ANNOUNCED: Grupo Corporativo ONO, a Madrid, Spain-based cable and telecommunications operator, said on Nov. 20 that it had begun a "Modified Dutch Auction" tender offers for a portion the several series of outstanding dollar- and Euro-denominated notes issued by its ONO Finance Plc subsidiary, and guaranteed by its operating unit, Cableuropa SAU and certain of the latter's subsidiaries.

A separate offer is being made with for each series of notes, with the offers structured to allow the company to purchase the largest aggregate principal amount of notes possible for up to a maximum total expenditure of €140 million, including accrued and unpaid interest on the notes and any early tender payments.

ONO said it would purchase up to $137.5 million face amount of its dollar-denominated 13% notes due 2009 and up to $100 million of its 14% notes due 2011, both at a price in the range of $220 to $320 per $1,000 principal amount of notes tendered.

ONO said it would purchase up to €62.5 million face amount of its euro-denominated 13% notes due 2009, up to €100 million of its 14% notes due 2010 and up to €75 million of its 14% notes due 2011, all at a price in a range of €220 to €320 per €1,000 principal amount of notes tendered.

The company set an expiration deadline for the offer of 11 a.m. London time on Dec. 19 with respect to notes held through Euroclear and Clearstream, and set 5 p.m. ET with respect to notes held through DTC. It set Wednesday (Dec. 4) as the early tender deadline and price determination date, with the clearing price set for each series of notes to be announced on Thursday (Dec. 5), with all deadlines subject to possible extension.

Holders tendering their notes before or by the early tender deadline and price determination date would be eligible to receive an early tender payment of $5 per $1,000 principal amount or €5 per €1,000 principal amount on notes accepted for payment at or below the respective clearing price of the appropriate series.

Holders submitting notes for purchase at a price below the level that is later chosen as the clearing price would have all of their tendered notes accepted for purchase and would receive the early tender payment on all of their tendered notes; holders submitting the notes for purchase at a level identical to that later chosen as the clearing price may have a pro-rated portion of their notes (with the amount to be determined) accepted for purchase and would receive the early tender payment on that possibly pro-rated portion of their notes, while holders submitting their notes for purchase at a price above the level eventually chosen as the clearing price would not have their notes accepted for purchase and would receive no early tender payment. Holders submitting notes for purchase after the early tender deadline and price determination date would not be eligible to receive the early tender payment for their notes, which would be purchased or not according to the above criteria.

ONO said that under the "Modified Dutch Auction" procedure, it would accept tendered notes in the order of the lowest to the highest tender prices specified by tendering holders within the applicable price range for the applicable series of notes. The company said it would set the clearing price for each series of notes as the single lowest price so specified that will enable it to purchase the maximum principal amount of notes announced for each series. ONO will pay the same clearing price for all notes of a given series that are tendered at or below that clearing price.

ONO further said that if the total of notes tendered for any given series is less than the announced maximum principal amount for that series, all notes of that series so tendered may be purchased. However, the company said it reserved the right to amend that initial maximum principal amount for each series of notes on the early tender and price determination date so that it can purchase the largest aggregate principal amount of notes possible for up to €140 million, including accrued and unpaid interest and any early tender payments. ONO said that should it amend the maximum principal amount of notes it is looking to purchase, the offer for that particular series will remain open for an additional 10 business days.

The company said that after setting the price it will pay for each series of notes, it would continue to accept tenders of each series of notes at the announced clearing price, although these tenders could be subject to proration by ONO. Holders who had tendered their notes on or before the early tender and price determination date at a price above what would later be announced as the clearing price for that series would have to re-tender their notes at the clearing price during this second stage of the offer if they wish to participate in it.

ONO said that all holders whose tendered notes are accepted for payment are to receive a cash payment equal to the clearing price for that series of notes, plus accrued and unpaid interest on those notes up to, but not including, the date of purchase. Holders would also receive the early tender payment, where applicable.

The company further said that unless otherwise required by law, holders tendering notes prior to the early tender and price determination date at or below the clearing price for that series may not withdraw their tendered notes after the early tender and price determination date. Notes tendered after the early tender and price determination date may not be withdrawn.

ONO said the tender offer would be subject to several conditions, including the valid tender (without a subsequent valid withdrawal) of at least €10 million in aggregate principal amount of the any series of notes being tendered for; the requirement that there be validly tendered and not validly withdrawn a total principal amount of at least €325 million of the notes, regardless of series; and fulfillment of the bank consent condition, which requires the lenders under ONO unit Cableuropa's senior bank credit facility agree to waivers necessary to allow completion of the company's proposed recapitalization, as well as certain beneficial amendments to financial covenants.

ONO said that between May 17 and Oct. 3, it had purchased notes on the open market, and currently holds approximately 16% of the aggregate outstanding principal amount. If the required amendments and waivers are received by the company from its lenders, and the company acquires notes under its tender offers, it will implement a recapitalization transaction that would, if completed, result in the cancellation of all or substantially all of the notes currently held by ONO and the notes which it will have purchased under terms of the tender offers.

If the required amendments and waivers are not received by the expiration date, ONO retains the option of either terminating the offers or waiving the bank consent condition and purchasing the notes tendered under the offers. Should the company choose the latter course, it will be under no obligation to complete the proposed recapitalization and may instead retain the notes purchased (and receive accrued interest thereon) or resell them in the market.

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