Wind Hellas In Talks with Creditors

(Reuters) – Greek mobile operator Wind Hellas, owned by Weather Investments, is talking to creditors about its debt structure as a result of a deterioration in business conditions in the last two months.

“Discussions have been initiated regarding the situation with Weather and certain of our creditor groups, either directly or indirectly through their advisers,” Wind Hellas said in a results statement, which was posted on its web site on Monday.

The company said it has retained Morgan Stanley, White & Case and Karatzas & Partners to advise it on its discussions with creditors.

Officials at Wind Hellas were not available for comment on Tuesday.

Last year parent Weather, the holding company of Egyptian tycoon Naguib Sawiris, won a battle to keep control of debt-laden Wind Hellas, beating off a rival restructuring bid from a group of subordinated bondholders.

Wind Hellas ran out of cash after launching a price war in Greece‘s saturated mobile phone market, losing customers to market leader COSMOTE, a unit of Greek telephone group OTE (OTEr.AT). Deutsche Telekom (DTEGn.DE) owns 30 percent of OTE.

Under that deal Weather, which has owned Wind Hellas since 2007, injected about 125 million euros ($186.6 million) into the company and restructured 3.2 billion euros of debt.

But Wind Hellas said the economic and competitive environment in Greece deteriorated in the first quarter, with revenue trends worsening in April and May as a result of austerity measures imposed by the government.

Total revenues from mobile telephony fell to 170 million euros in the first quarter from 197.8 million in the last three months of 2009, and market share fell as a result of competition.

Greece‘s economy is expected to contract for a second straight year in 2010, with the recession seen deepening to about 4 percent.

“At the end of the first quarter Wind Hellas had a manageable capital structure. Based on April and May trends, the situation has become increasingly critical,” it said. (Reporting by George Georgiopoulos; Editing by Greg Mahlich)