Analysts express doubts over Netia bond buy-back plan

Alternative fixed-line telecoms operator Netia on Friday announced a bid to buy back its international bonds at a fraction of their nominal value. However, analysts predict that Netia's plan to buy back up to 85% of its euro 850 million foreign loans at 11% to 14% of their nominal value may be rejected by debt investors. "They are attempting to turn things around at a low cost. But I am skeptical if investors will back this plan," commented Andrzej Kasperek, an analyst at Bank Handlowy brokerage in Warsaw. Netia, whose debts currently stand at zl.2 billion, is planning to spend no more than zl.530 million to zl.550 million on repurchasing its debt. The company' s assets are currently valued at zl.650 million, almost zl.400 million less than a year ago. But since they are worth more than the company is willing to pay to repurchase the bonds, it is likely that foreign bondholders will prefer to keep their investment, with a view to taking part in the liquidation of Netia assets in the event of the company's bankruptcy. Most analysts agree that the only investors who are likely to accept Netia's offer are the few who purchased Netia bonds in October when its shares were valued at zl.2 to zl.3 and its bonds traded at 10% below their face value. (Gazeta Wyborcza, Nov. 10-11, p. 31; Reuters) M.T.K.