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Published on 7/26/2005 in the Prospect News Distressed Debt Daily, Prospect News Emerging Markets Daily and Prospect News High Yield Daily.

Barak agrees to pay $40 million under note restructuring

By Caroline Salls

Pittsburgh, July 26 - Barak ITC (1995) - The International Telecommunications Services Corp. Ltd. has entered into a restructuring agreement with 65% of its bondholders, Clalcom Ltd. and Clal Industries and Investments Ltd. over the restructuring of its 12½% senior subordinated discount notes due 2007, according to a company news release.

The agreement provides for the financial restructuring of the company, including the 12½% notes, of which $122.38 million are outstanding.

Within the next three business days, the company will deposit $7.65 million to pay the coupon, which was due on Nov. 15, 2004.

Under the agreement, Barak will also make a total payment of $32.35 million upon consummation of the agreement.

Barak also agreed with its bondholders that the bond principal amount will be reduced to $65 million. The company will pay interest at 10% over five years. The maturity date of the restructured notes will be November 2010.

The agreement still needs to be approved by an Israeli court, at least 75% of noteholders, the U.S. bankruptcy court and the company's current senior bank lenders.

Also, the company's shareholders need to terminate their existing joint venture agreement and agree to amend the company's Articles of Association, and the Israeli Anti-Trust Commissioner and the Israeli Ministry of Communications must content to several plan aspects.

Barak is a long-distance carrier and internet service provider based in Rosh Ha'Ayin, Israel.


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