Transtel to ask shareholders to approve funding for tender for convertibles, extends consent deadline

By Jennifer Chiou

New York, May 5 - Transtel Tenderco, Ltd. said it is calling a May 11 shareholders meeting to approve changes related to its tender offers for any and all of parent Transtel SA's $144.586 million of 12½% senior secured convertible notes due 2008 and $41,521,759 accreted value of convertible subordinated notes due 2008 represented by 152,086 units.

Each unit represents $1,000 of 12½% senior secured convertible notes due 2008, $205 initial accreted value convertible subordinated notes due 2008 and one shares trust certificate for 634,970 Transtel shares. The shares trust certificates will not be purchased in the tender offers.

Shareholders will be asked to approve an issue of warrants or other equity-linked securities from wholly owned subsidiary Transtel Intermedia SA to fund the offer.

They will also vote on proposed changes to the company's corporate structure as part of the refinancing plan to retain ownership of Transtel Tenderco in order to simplify the ownership structure of Transtel Intermedia.

In addition, Transtel's shareholders will be asked to waive the required 35-day notice for a shareholders meeting.

Approvals are required for completion of the tenders.

Noteholders who tender their securities before 5 p.m. ET on May 11 - the new consent deadline - are considered to have delivered additional consents.

The consent deadline previously was 5 p.m. ET on April 28.

On May 2, the company said holders of 96% of each of the notes tendered their securities, after which it executed a supplemental indenture.

The company solicited consents to amend the notes' indentures to waive and any all existing defaults; to eliminate all restrictive covenants and events of default; to terminate the mandatory sale process agreement related to the 12½% notes; to modify payment schedules for some intercompany notes due to Transtel and intercompany leases of telecommunications equipment; to assign rents due under intercompany leases to a new Transtel Colombian subsidiary; to reflect modified repayment schedules in the trust agreement for payments on intercompany agreements; to adopt shareholder approval to authorize the tenders and refinancing transactions; and to allow separation of the units into their component securities.

After a mandatory $7.5 million prepayment on Dec. 31, $950.69 of each $1,000 original principal amount of 12½% notes is outstanding.

Assuming a May 15 closing, $205 initial accreted value of convertible subordinated notes will have an accreted value of $273.02.

The offers expire at midnight ET on May 12.

For each $1,000 principal amount of 12½% notes, the company will pay $950.69. For each $205 initial accreted value of convertible subordinated notes, the company will pay $60.00.

Those who tender their holdings before the new consent deadline will receive the $25.00 consent payment for the 12½% notes and $1.50 consent payment for the convertible subordinated notes, already included in the payout.

The offers are conditioned upon the receipt of tenders from holders of at least 90% of the 12½% notes, holders of at least 50% of the convertible subordinated notes, at least a majority of holders of shares trust certificates, the placement of new notes and the execution of supplemental indentures.

MacKenzie Partners, Inc. is the information agent (call collect 212 929-5550 or 800 322-2885). Morgan Stanley & Co. Inc. is the dealer manager and solicitation agent (call collect 212 761-1864 or 800 624-1808).

On Dec. 14, Transtel Tenderco terminated an earlier tender for Transtel's units because of failure to meet the funding condition for the tender and consent solicitation.

Based in Cali, Colombia, Transtel is a fixed-line private telecommunications company. The company began the offer on April 18.

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