Romanian company RCS&RDS, one of the biggest telecomoperators in the region, has delayed the sale of $200m worth ofbonds on the foreign market because of the difficult financialmarket conditions, rating agency Standard & Poor's said,quoting market sources.
Citibank London, arranger of the issue, had been trying to placethe 2017 maturing bonds at an interest rate of 9.75% and 10% indollars, according to S&P.
The yield offered by RCS&RDS was not enough for investors,though, who asked for a higher interest given the internationaleconomic context and the company's current indebtedness level,banking sources told ZF.
RCS&RDS' debts are 2.5 bigger than operating income(EBITDA). Talks held in London last week did not have a positiveoutcome, as foreign investors' interest was low consideringRCS&RDS did not want to pay an interest rate of above 10% indollars, the above-quoted sources said.
According to S&P, RCS&RDS needs money to bolster its lowlevel of liquidity (just $5m in September 2009) and to finance itscurrent debts and a series of undergoing acquisitions. The companyhas short-term debts worth $59m and financial amortisationoperations worth 150m dollars each scheduled in 2011 and 2012,related to the $500m loan contracted from ING and Citi in 2007,according to S&P.
The operator reported operating income worth $78m for the firstnine months of 2009, amid $518m revenues.
RCS&RDS representatives could not be contacted forcomment.
RCS&RDS abandoned floatation on the LSE in 2007, as well,also because of the difficult market conditions. The companycontrolled by Zoltan Teszari had planned to raise as much as 575million dollars through floatation, without loading its balancesheet with debts.
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