Multicanal to restructure debt

Grupo Clarin subsid must revise offer by Sept. 30

BUENOS AIRES — Argentine cabler Multicanal has sweetened an offer to restructure the $525 million of debt it defaulted on last year in a bid to win over wary creditors.

The subsidiary of local media conglom Grupo Clarin only attracted participation from investors holding 45% of the debt through July 25, off the two-thirds participation that it sought to go ahead. It announced the offer in January.

To woo more creditors, Multicanal is offering more equity — up to 35% of the company’s capital, not 30% — to those who swap existing bonds for new securities, and will pay interest on the new debt three times a year, not twice. The new bonds will be worth 44% of the original debt, more than 31.5% under the previous offer.

The company also increased its offer to buy back debt at 30% of its original value to $131 million from $100 million, and reduced the required participation for the deal to 66.7% from 70%.

The deadline for the revised offer is Sept. 30.

Multicanal borrowed heavily in the 1990s to buy cable assets, weaving together the second biggest network in Argentina. But the debt burden left it vulnerable when Argentina’s economy crashed at the end of 2001.

The economic crisis has reduced the subscriber base in Latin America’s most-cabled market by 20% to four million, a heavy blow to Multicanal and its bigger rival Cablevision, owned by Hicks, Muse, Tate & Furst and Liberty Media.

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