Judge clears way for Multicanal reorg

Ruling allows cabler an out-of-court settlement

BUENOS AIRES — A judge has thrown out all the challenges to No. 2 cabler Multicanal’s plan to restructure the $525 million debt on which it defaulted during the 2001-02 economic crisis.

Ruling allows the company to move ahead with an out-of-court settlement to repay its debt at a discount and take advantage of an economy set to expand 6%-7% this year after growing 8.7% in 2003.

Ruling blocks six creditors holding 30% of the debt, some of which are affiliated with U.S. vulture fund W.R. Huff. They were seeking to receive a full return of their investment.

They must adhere to Multicanal’s repayment terms. These include swapping debt for equity and longer-term bonds that pay less interest and exchanging some debt at 30% of its original value for cash.

It is unclear if the creditors can appeal.

Multicanal, a subsid of local media conglom Grupo Clarin, amassed the debt in the 1990s, when it spent $1 billion to buy cable assets to create a network of 1.4 million subscribers — about a third of a cable market that then boasted 5 million subs.

Since the crisis, though, the cabler has lost 336,600 subs, in line with the overall market’s decline to 3.5 million.

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