MONTREAL-Telesystem International Wireless Inc. said Hong Kong-based Hutchison Whampoa Ltd. and Chase Capital Partners will make a $300 million investment in TIW under terms of an agreement signed last week by the companies.
Hutchison and Chase Capital each will purchase $150 million of equity subordinated debentures convertible into TIW subordinate voting shares. These debentures carry a conversion price of $42.25 per share, based upon a 25-percent premium to TIW’s volume weighted average stock price for a 20-day trading period which ended Feb. 28, TIW said.
TIW can repay the principal in cash or additional securities when the debentures, which carry a coupon of 7.75 percent, mature in 2010. Hutchison has the option to buy an additional $50 million of convertible equity subordinated debentures.
It is also expected that one representative each from Hutchison and Chase Capital will join TIW’s board of directors, the company said.
As part of the deal, TIW said it plans to continue to explore opportunities and is in negotiations with Hutchison for financial and commercial support with regard to TIW’s U.K. Universal Mobile Telephone Service business plans.
Shares of TIW were trading at $48.06 on Nasdaq at RCR press time, up $2.50 from the previous day’s close.
