Elektrim bondholders agree to repayment proposals

Troubled Polish telecom and power group Elektrim announced that it has reached a preliminary deal with its creditors which would stave off the threat of bankruptcy. The agreement was made with a committee representing 50% of the owners of convertible bonds worth euro 440 million. It is unknown how the remaining bondholders will react. Thanks to the deal Elektrim will have more time to pay back bondholders in return for giving up its bid to reduce these debts. Elektrim said it will issue new restructured bonds and repay euro 200 million of its debts by June 15. euro 100 million would be repaid by December 15 2002 and the remaining euro 190 million would be repaid by July 2005. The bonds will be secured against Elektrim's 49% stake in Elektrim Telekomunikacja. The first euro 200 million tranch will be partially sourced from Elektrim's funds coupled with a euro 100 million syndicated loan which is to be raised by BRE Bank. It is possible that the bank will also finance the December tranch. Elektrim did not officially say what the terms of the loans are, but as with the new bond issue, the loan will be secured against Elektrim's assets (Gazeta Wyborcza, p. 25; Reuters) A.Z.