Romanian company RCS&RDS, one of the biggest telecom operators in the region, has delayed the sale of $200m worth of bonds on the foreign market because of the difficult financial market conditions, rating agency Standard & Poor's said, quoting market sources.
Citibank London, arranger of the issue, had been trying to place the 2017 maturing bonds at an interest rate of 9.75% and 10% in dollars, according to S&P.
The yield offered by RCS&RDS was not enough for investors, though, who asked for a higher interest given the international economic 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 positive outcome, as foreign investors' interest was low considering RCS&RDS did not want to pay an interest rate of above 10% in dollars, the above-quoted sources said.
According to S&P, RCS&RDS needs money to bolster its low level of liquidity (just $5m in September 2009) and to finance its current debts and a series of undergoing acquisitions. The company has short-term debts worth $59m and financial amortisation operations 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 first nine months of 2009, amid $518m revenues.
RCS&RDS representatives could not be contacted for comment.
RCS&RDS abandoned floatation on the LSE in 2007, as well, also because of the difficult market conditions. The company controlled by Zoltan Teszari had planned to raise as much as 575 million dollars through floatation, without loading its balance sheet with debts.
Romanian company RCS&RDS, one of the biggest telecom operators in the region, has delayed the sale of $200m worth of bond
