BUENOS AIRES — Cablevision, controlled by Liberty Media and Hicks, Muse, Tate & Furst, has secured creditor approval for a $796 million debt restructuring. Move would pave the way for the cabler to increase spending to regain subs lost during Argentina’s 2001-02 economic crisis.
Creditors accepted an offer to swap debt for cash, lower-interest bonds and up to 20% of the company’s equity. Control is to remain with Liberty Media and Hicks Muse.
Cablevision defaulted on the debt, which it amassed in the 1990s to build Argentina’s largest cable network, after the economic collapse cut revenue, increased costs and tightened access to credit.
Once the debt restructuring is complete, company will have more cash and credit to invest in marketing, programming and technology. It hopes to take advantage of a recovering economy that helped it boost subs by 6.2% in the first nine months of 2004 from a year earlier. It has 1.3 million customers, down from a peak of 1.5 million in 1998-99.
Cablevision is the second cabler to gain creditor backing for a restructuring despite pressure from vulture funds to gain equity stakes or higher repayments on the debt they hold.
Last month, a federal judge gave No. 2 cabler Multicanal, owned by Argentinean media conglom Grupo Clarin, the go-ahead to proceed with an offer to exchange $525 million in defaulted debt for cash, equity and longer-term bonds that pay less interest.