Schefenacker revises restructuring deal

Schefenacker PLC's creditors' meeting, which was due to have been held on Friday 30 March to cram down €200million of bondholder claims to a 5% equity stake through a Company Voluntary Arrangement, has been adjourned to 4 May, according to the company and as reported by Plastics Industry News. Modifications offering bondholders 15% of the equity and a total of €7.5m in cash will be put to the vote when the meeting reconvenes.

Speculation (see earlier post) that the original proposals, published on 9 February, did not offer enough for bondholders proved correct.

Full details of the modifications - particularly how far Dr Schefenacker, the original shareholder, will be diluted if the bondholders receive 15% - have yet to emerge, but it is clear that bondholders were prepared to risk losing everything in a liquidation rather than settle for 5%.

After a very difficult 6 months, is there light at the end of the Schefenacker tunnel? And is migration becoming a successful and accepted mechanism for restructuring distressed German companies?

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