OTE comes to terms with noteholders

Greek telecommunications company OTE, the majority shareholder of RomTelecom, has announced its noteholders agreed to have certain contractual stipulations modified so that the loan would not be affected by Cosmorom’s failure to pay its debts.

An OTE release shows the deal is ironclad and will be enacted during the noteholders meeting on June 30. The bonds are due in 2007 and bear 6.125% interest, while the total issue is worth 1.1bn euros. OTE’s request was conveyed to noteholders early in June, as the failure of Cosmorom, the mobile telephony operator held by RomTelecom, to pay its debts would have allowed creditors to demand immediate payment of the bonds issued by OTE Plc., a branch of the Greek group. Following this agreement, OTE’s noteholders will get a 2.5 euro fee for every one thousand euro bond. Cosmorom registers more than 100 million euros in debts to its main equipment supplier. OTE specified it had no intention of feeding more cash into Cosmorom to help it pay its debts. The Cosmorom situation is actually the reason why Standard & Poor’s and Moody’s decided to monitor OTE. ZF