UPC Polska agrees restructuring, to file Chapter 11; bondholders to receive cash, new notes

New York, June 20 - UPC Polska Inc. said it has reached a binding agreement with creditors holding 86% of its debt on a restructuring that will be achieved through a prepackaged Chapter 11 filing.

The transaction will reduce UPC Polska's debt by $875 million or 93%.

Holders of $373 million accreted value of publicly tradable notes will receive $80 million in cash and $60 million of new 9% senior notes due 2006. This group of holders excludes affiliates of UPC Polska. The existing notes are UPC Polska's senior discount notes due 2009, series C senior discount notes due 2008 and senior discount notes due 2008.

UPC Polska said the restructuring is separate from the restructuring nearing completion at United Pan Europe Communications NV.

The transaction was agreed with an ad-hoc committee of bondholders holding 68% of UPC Polska's publicly tradable bonds and UPC Telecom BV and Belmarken Holding BV, wholly owned subsidiaries of United Pan Europe. UPC Telecom and Belmarken hold $77 million of UPC Polska's bonds and substantially all the company's other debt.

Under the proposal, the existing publicly tradable bonds will be canceled along with $482 million of loans and affiliated debt held by United Pan Europe subsidiaries and $6 million of other debt.

The subsidiaries of United Pan Europe will receive $15 million in cash and all the common stock of the reorganized UPC Polska.

The United Pan Europe subsidiaries will not receive anything for their existing equity interest in UPC Polska.

On completion of the restructuring the $60 million of new notes will be UPC Polska's only debt.

UPC Polska expects to complete the restructuring by the end of 2003.

UPC Polska also said its Poland Communications Inc. will repay its $14.5 million of notes at maturity on Nov. 1, 2003. On March 24, UPC Polska deposited funds with a trustee to the principal and interest on these notes.

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