UPC Polska reaches agreement with creditors, noteholders to receive more new notes, stock

By Peter Heap

New York, Dec. 22 - UPC Polska LLC said it reached an agreement with its various creditor groups on a new plan of reorganization that gives third-party noteholders more new notes and stock in the company's indirect parent UnitedGlobalCom Inc.

Under the new plan, holders of UPC Polska's notes will receive $80 million in cash, $100 million in new 9% notes due 2007 and $14.5 million of UnitedGlobalCom stock, based on the Dec. 15 Nasdaq closing price.

Affiliated creditors will receive $15 million in cash and all the common stock of the reorganized company, unchanged from the original proposal.

Under the prepackaged plan UPC Polska agreed ahead of its Chapter 11 filing, third-party noteholders would have received $80 million in cash and $60 million of new 9% senior notes due 2006.

The new plan of reorganization was agreed with Polska Finance, the company's affiliated creditors, UPC Operations BV, the participating noteholders and the Official Committee of Unsecured Creditors. The various parties have entered into a stipulation concerning the modified plan.

A hearing on the amended plan of reorganization will be held on Jan. 21 and Jan. 22.

The original plan had been agreed with creditors holding 86% of its debt including 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.

UPC Polska has $373 million accreted value of publicly tradable notes made up of its senior discount notes due 2009, series C senior discount notes due 2008 and senior discount notes due 2008.

But when the Chapter 11 proceedings began in the U.S. Bankruptcy Court for the Southern District of New York, the official creditors committee objected that the prepackaged plan put too low a value on the company and, they claimed, would favor insiders.

UPC Polska also said that it has converted into a Delaware limited liability company and changed its name to UPC Polska LLC from UPC Polska Inc.

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