"the new loan that would be tantamount to [giving the banks] partial seniority".
This is what I mean a company run byt the creditors.
Marconi nears deal on fresh $4.3bn loan facility
By Caroline Daniel in London
Published: January 20 2002 21:01 | Last Updated: January 20 2002 21:09
Marconi, the UK telecoms equipment group, is understood to be close to agreeing the framework of a new loan facility of up to £3bn ($4.35bn), replacing its two existing arrangements.
Although bank creditors indicated that progress had been made, and they were willing to offer Marconi breathing space to sort out its trading problems, one leading creditor stressed that agreement had still not been reached.
Marconi declined to comment on Sunday. Last week Steve Hare, finance director, suggested that Marconi would not be rushed into a resolution. "Although we said ideally we would like to resolve this by the end of March, there isn't actually a fixed timetable," he said.
The steering committee of Marconi's banks - led by HSBC and Barclays - is expected to meet the wider group of 31 creditor banks on Monday to recommend a framework for refinancing Marconi's debt.
The banks are expected to propose a new facility of up to £3bn, which would "subsume all the companies' current credit requirements, with the working capital lines also tied into the new facility," said one person involved with the talks.
Marconi's current E3bn ($2.64bn) facility expires in March 2003. The new facility would run until mid to late 2005.
As part of the agreement, Marconi would be expected to repay some of its debts. The company has raised about £1.5bn from disposals in the past few months. Last week it spent £110m to buy back bonds with a face value of £200m. Marconi's bondholders are concerned that the company may give creditors a superior claim on its assets as part of a new loan.
One investment banker suggested that "although technically the creditors will not have security over the assets, there are elements of the new loan that would be tantamount to [giving the banks] partial seniority". |
