Largest Unsecured Creditor Rejects Norske Skog Recapitalization Proposal
Pubblicato il: 12/10/2017 16:30
"Funds managed by Bennett have held unsecured bonds of Norske Skog for several years and currently own over 50% of the 2026 issue and over 40% of the 2033 issue, which together represent over €100 million of claims of the Senior Unsecured Notes issued by Norske Skogindustrier ASA ("SUNs"). While we support a restructuring that converts all of our debt to equity, we are not prepared to accept a 98% write-off, while the purportedly "secured" debt (the SSN and NSFs) receives €421.7 million for their €390 million face amount of debt (108% recovery). (All amounts and values are based on the data included in the company's Final Consensual Proposal).
As we repeatedly told Norske Skog's management this week, we are prepared to accept the over-recovery by the SSN/NSFs and the other terms of the recapitalization, even though they are unfair, if the combined recovery by the SUNs and the Exchange Notes issued by Norske Holding AS ("PENs") is increased by €1.5 million of additional equity value (0.7% of pro forma recapitalization shares). Norske Skog's board apparently decided to reject our request and to proceed instead with a proposal they know cannot succeed, because it is conditioned on our consent. By proceeding in this way, Norske Skog's board is jeopardizing the health of the company and the fate of its employees. Unless the board relents, the inevitable consequence of their action is a value destructive bankruptcy that all parties should want to avoid.
Finally, we note that the PEN/SUN's recovery under the plan is €11.4 million for its €412 million of claims as compared to the SSN/NSF's recovery of €421.7 million. We urge the Norske Skog Board and the holders of the SSN/NSF's to do the sensible thing and accept our very fair proposal - €1.5 million of additional equity value (0.7% of pro forma recapitalization shares) for the PEN/SUN's.
It's management and the SSN/NSF's choice – bankruptcy or a consensual deal."
According to the information published by Norske Skog, the transaction must be approved by over 75% in value of the creditor groups. As such, the proposal cannot be implemented without the approval of Bennett.
About Restructuring Capital Associates, L.P.
Restructuring Capital Associates, L.P. ("RCA") is an investment adviser registered with the U.S. Securities and Exchange Commission headquartered in Stamford, Connecticut. RCA and its affiliates have a 28 year history of managing investment funds to maximize total return on their investments in financially troubled companies and other special situations.