Transtel offers notes and stock or all notes to senior noteholders

By Carlise Newman

Chicago, Sept. 19 - Transtel S.A. offered details of its reorganization plan under Law 550 of Colombian law, and said noteholders have two plans to choose from.

Holders of Transtel's $150 million 12½% senior notes due 2007 and $95.6 million 20.32% senior discount notes due 2008 who vote to approve the restructuring agreement can opt either for the "capitalization plan" or the "base plan."

Under the capitalization plan, in exchange for their existing notes holders will receive new 12½% senior secured notes due 2008 with a principal amount equal to 51.7% of the claim, convertible subordinated notes due 2008 with a principal amount equal to 10.2% of the claim and up to 123.52 billion share trust certificates, representing 20% of the company's equity.

The senior secured notes will amortize quarterly from excess cash flow and by 5% on Dec. 31, 2005, and 10% on that date in 2006 and 2007. Up to $110 million will be issued.

Collateral securing the new senior notes is all assets of Transtel and its subsidiaries. If the restructuring agreement is approved by less than 60% of the total voting rights, the collateral securing the notes will not include assets of Transtel, other than the existing senior inter-company notes.

Transtel will issue up to $21.67 million of the convertible subordinated notes due 2008. They will convert at maturity unless redeemed first. They will also convert on a change of control or event of default. The conversion rate depends on when they are converted. Interest will accrete, starting at 2.5% and rising to 5%.

Under the base plan option - which will also be automatically applied to noteholders who vote against the plan or who do not vote - holders will receive a like par amount of senior unsecured floating rate notes due 2013, with no interest for the first three years and Libor flat thereafter. Up to $212.90 million of these notes will be issued.

The voting deadline is set for Oct. 10, and the court approval date is set for Oct. 17.

D.F. King & Co. is the voting agent (beneficial owners call 800 848-3416, brokers, banks and others call collect at 212 269-5550).

The disclosure statement is at:

http://www.sec.gov/Archives/edgar/data/1058695/000114043703000344/tr30910ext3e.txt

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