BUENOS AIRES — A federal judge has approved Argentine cabler Cablevision’s $796 million debt restructuring, ending a seven-month legal conflict that threatened to derail the U.S.-backed company’s ability to return to profit.
Some 99% of holders of Cablevision debt accepted its restructure terms in November, but a handful of holdouts filed action on allegations of fraud. They wanted full repayment, not the offer of cash — 40¢ for each $1 in debt, lower interest bonds and up to 20% of the company’s equity.
On Monday the judge rejected objections to the deal after finding no “case of fraud or abuse,” adding that its overwhelming acceptance by creditors was reason enough for it to go ahead.
Cablevision, Argentina’s biggest cable company, defaulted on the debt in the wake of the country’s 2001-02 economic crisis and 65% currency devaluation.
This dried up credit, cut revenue, increased costs and led to an 18% loss in subs. A major shareholder — John Malone’s Liberty Media — sold out.
Cabler now is 50% owned by Texan buyout fund Hicks, Muse, Tate & Furst; 25% by Fintech Media, a U.S. investment fund managed by Mexican millionaire David Martinez; and 25% by investment group Vistone.
With the debt problems over, the company plans to invest again in marketing, programming and technology to take advantage of a recovering economy to win back subs. It has 1.3 million, below its peak of 1.5 million in 1998-99.
A main thrust of this investment plan is a $220 million, five-year project to digitalize its network. It wants to offer digital TV, faster broadband connections and telephony over its network, which reaches 3.5 million homes, or 35% of the national total. That would boost revenue per subscriber, breaking its reliance on monthly sub fees.