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September 20, 2002 — (WEB HOST INDUSTRY REVIEW) — Canadian telecommunications company Telus Corp said on Thursday that it has purchased about $400 million Canadian of its debt at a discount and will book a pretax gain of about $78 million from the transaction.
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The company reportedly financed the buyback with proceeds from a $337 million equity offering that closed on Thursday. According to Telus, the company generated about $324 million from the sale of 34.25 million nonvoting shares.
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Telus said it repurchased approximately $400 million notes for about $308 million in cash. The repurchased notes included $49 million due in 2003, $22 million due in 2006, $210 million due in 2007 and $118 million due in 2011.
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According to the company, repurchasing the debt at a discount will allow Telus to book a $78 million pretax gain in the third quarter, which amounts to about $63 million after tax.
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Telus says the company has materially reduced its debt, which had been a major factor influencing the value of Telus securities. Telus?s credit ratings were reduced to “junk” status in July by Moody?s Investors services, causing the company?s stocks to fall sharply.
