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Champ admits $175 million exposure on Blue Star

Wednesday, 10 August 2011
By Print21

Private Equity fund says it is prepared to add another $15.7 million to its investment in order to keep the company afloat.

At the crucial meeting of Blue Star bondholders currently underway in Auckland, Champ representative, Nat Childres, acknowledged the tough ask of the bondholders but said there was no viable alternative. He said Blue Star is positioned for a turnaround, if the bondholders accept the restructuring of their $105 million existing bonds, which will effectively see them take a ‘bath.’

The meeting was opened by Roger France, director, who said the deal was the best that could be hammered out in ‘brutal’ negotiations between the board and the senior lenders, led by BNZ. The bansk are owed $195 million and are prepared to top it up with a further $10m.

Chris Mitchell, managing director, has warned that the banks will move to protect their position if the bondholders knock back the deal and the company is likely to be put into administration.

The bondholders are being asked to swap their existing bonds into two lots – $67.5 million won’t pay interest until 2013 and $37.5 million will never pay interest but over the long term can be converted into equity.

Stay tuned

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