Telecom restructuring: model for AC debt restructuring ?
Jun 4, 2003, 5:56 am
#1
FlyerTalk Evangelist
Original Poster
Join Date: Mar 2000
Location: Southern Alberta
Posts: 20,550
Telecom restructuring: model for AC debt restructuring ?
"Air Canada is eyeing recent tele.com restructurings as a template for how to get around Canada's re.strictive foreign ownership limits as it seeks to raise new equity and turn up to $9-billion of debt into new shares.
The insolvent airline told union leaders last month that in order to emerge from bankruptcy protec.tion, its unsecured creditors must agree to convert billions of dollars in debt into stock, rendering current shares virtually worthless.
This poses a challenge, because Canadian law prevents foreign in.vestors from either controlling an airline or owning more than 25 per cent of its voting shares. Most of Air Canada's debt is foreign-held.
The airline is also looking to attract new equity from foreign in.vestors, including Texas Pacific Group, to fund its emergence from bankruptcy protection.
Sources say the airline is study.ing the recent restructurings at AT&T Canada Inc., Call-Net Enter.prises Inc. and Microcell Telecommunications Inc., which turned billions of dollars in foreign debt into equity despite similar ownership restrictions.
http://makeashorterlink.com/?F28B42DC4
The insolvent airline told union leaders last month that in order to emerge from bankruptcy protec.tion, its unsecured creditors must agree to convert billions of dollars in debt into stock, rendering current shares virtually worthless.
This poses a challenge, because Canadian law prevents foreign in.vestors from either controlling an airline or owning more than 25 per cent of its voting shares. Most of Air Canada's debt is foreign-held.
The airline is also looking to attract new equity from foreign in.vestors, including Texas Pacific Group, to fund its emergence from bankruptcy protection.
Sources say the airline is study.ing the recent restructurings at AT&T Canada Inc., Call-Net Enter.prises Inc. and Microcell Telecommunications Inc., which turned billions of dollars in foreign debt into equity despite similar ownership restrictions.
http://makeashorterlink.com/?F28B42DC4
