Metromedia International Group Inc. says it has completed the sale of its interest in a local exchange carrier in St. Petersburg, Russia.

The cash deal is valued at $215 million.

When Charlotte-based Metromedia (Pink Sheets:MTRMP) announced the deal to sell PeterStar in February, it identified the buyers as Emergent Telecom Ventures, First National Holding and their subsidiary, Pisces Investment.

Upon completion of the sale, Metromedia's principal business is as a mobile phone and a long-distance company in the Republic of Georgia.

Metromedia says it will use the proceeds from the sale to fully redeem its 10.5% senior notes Aug. 8.

The aggregate redemption price of the senior notes, including accrued interest, is $157.7 million.

This month, Metromedia announced it had defaulted on the terms of the notes, which are due in 2007.

The company failed to file its annual report for 2004 with the Securities and Exchange Commission and deliver its quarterly results and other certificates to the holder of the notes on or before a July 15 deadline.

As a result, the indenture trustee or holders of at least 25% of the aggregate principal amount of the notes outstanding can declare them payable immediately.

If this were to happen, Metromedia said it wouldn't have sufficient cash available to meet the obligation.

Metromedia said the holder of 80% of the notes had agreed to extend until Aug. 15 a waiver of default.

News source: charlotte.bizjournals.com
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