AT&T Canada starts talks with holders of 60% of bonds, to meet banks next week

New York, July 29 - AT&T Canada said its board of directors has formally recognized an ad hoc committee representing holders of more than 60% of its bonds and that discussions are under way on a consensual restructuring of the debt.

The Toronto, Ont. telecommunications company added that those bondholders who had begun litigation have agreed to suspend the legal action pending progress in the restructuring discussions.

AT&T Canada will present its revised operating plan to its bank syndicate this week with the plan to form the basis of discussions about its credit agreement.

The company said it is in compliance with its financial covenants.

Negotiations on restructuring the bonds and bank debt are expected to be completed by the end of the year, AT&T Canada added.

If it takes longer, the company said that under the current operating plan, and absent an improvement in either the economy or the Canadian telecommunications regulatory environment, the company could be required to renegotiate the EBITDA covenant in its bank credit facility to enable it to continue to comply with that covenant.

Currently the company has more than $400 million of cash on hand.

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