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Telecom Argentina S.A. Announces the Cancellation and Prepayment of All of its Outstanding Financial Debt of US$ 1.9 Billion

Posted on: Thursday, 15 October 2009, 16:11 CDT

BUENOS AIRES, Argentina, Oct. 15 /PRNewswire-FirstCall/ -- Telecom Argentina S.A. (NYSE: TEO, BASE: TECO2), one of Argentina's leading telecommunications groups, announced today that it has cancelled the remaining portion of the debt issued on August 31, 2005 in accordance with the terms and conditions of the APE executed with its financial creditors for the equivalent of US$ 1,883 million.

In August 2005, after the outbreak of the Argentine crisis of 2001/2002, Telecom Argentina reached an agreement with its local and international financial creditors taking into consideration the repayment capacity of the Company and without affecting the sustainability of the Telecom Group's businesses.

Chief Executive Officer Franco Bertone stated, "Shareholders' support was essential for the restructuring of our financial obligations." He added, "We were able to meet the financial obligations agreed to in 2005 thanks to the effort and commitment of our people together with efficient and disciplined management of our operations. A new stage of development for the Telecom Group begins today, which we will face with our financial and operational strengths to grow in market share, revenues and results."

The efficient management of the resources enabled the Company to cancel the debt issued in accordance with the terms and conditions of the APE 5 years in advance of the original repayment schedule. With the cancellation performed today, Telecom Argentina has anticipated the commitment undertaken with local and international financial markets pursuant to the APE.

Telecom Argentina is the parent company of a leading telecommunications group in Argentina, where it offers directly or through its controlled subsidiaries local and long distance fixed-line telephony, cellular, data transmission and Internet services, among other services. Additionally, through a controlled subsidiary, the Telecom Group offers cellular services in Paraguay. The Company commenced operations on November 8, 1990, upon the Argentine Government's transfer of the telecommunications system in the northern region of Argentina.

Nortel Inversora S.A. ("Nortel"), which acquired the majority of the Company from the Argentine government, holds 54.74% of Telecom Argentina's common stock. Nortel is a holding company where the common stock (approximately 68% of capital stock) is owned by Sofora Telecomunicaciones S.A. Additionally, Nortel capital stock is comprised of preferred shares that are held by minority shareholders.

Disclaimer

This document may contain statements that could constitute forward-looking statements, including, but not limited to, the Company's expectations for its future performance, revenues, income, earnings per share, capital expenditures, dividends, liquidity and capital structure; the effects of its debt restructuring process; the impact of emergency laws enacted by the Argentine Government; and the impact of rate changes and competition on the Company's future financial performance. Forward-looking statements may be identified by words such as "believes," "expects," "anticipates," "projects," "intends," "should," "seeks," "estimates," "future" or other similar expressions. Forward-looking statements involve risks and uncertainties that could significantly affect the Company's expected results. The risks and uncertainties include, but are not limited to, the impact of emergency laws enacted by the Argentine government that have resulted in the repeal of Argentina's Convertibility law, devaluation of the peso, various changes in restrictions on the ability to exchange pesos into foreign currencies, and currency transfer policy generally, the "pesification" of tariffs charged for public services, the elimination of indexes to adjust rates charged for public services and the Executive branch announcement to renegotiate the terms of the concessions granted to public service providers, including Telecom. Due to extensive changes in laws and economic and business conditions in Argentina, it is difficult to predict the impact of these changes on the Company's financial condition. Other factors may include, but are not limited to, the evolution of the economy in Argentina, growing inflationary pressure and evolution in consumer spending and the outcome of certain legal proceedings. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this document. The Company undertakes no obligation to release publicly the results of any revisions to forward-looking statements which may be made to reflect events and circumstances after the date of this press release, including, without limitation, changes in the Company's business or to reflect the occurrence of unanticipated events. Readers are encouraged to consult the Company's Annual Report on Form 20-F, as well as periodic filings made on Form 6-K, which are filed with or furnished to the United States Securities and Exchange Commission for further information concerning risks and uncertainties faced by Telecom.

SOURCE Telecom Argentina S.A.

Source: PR Newswire

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