Posts que contém a Tag restructuring
General Motors – Distressed Debt Exchange Offer ($27b)
General Motors has announced it is commencing public exchange offers for $27 billion of its unsecured public notes. General Motors Nova Scotia Finance Company, a subsidiary of GM, is jointly making the exchange offers with GM with respect to its pound sterling denominated notes. The exchange offers are a vital component of GM’s overall restructuring plan to achieve and sustain long-term viability and the successful consummation of the exchange offers will allow GM to restructure out of bankruptcy court.
Here is an executive summary from the press release:
(1) Commencing exchange for $27B of unsecured notes
(2) Exchange is vital to restructuring out of court
(3) 225 shares per $1,000 of bond principal.
(4) Cash will be paid out for accrued interest. According to the press release, USD interest accruals range anywhere from $7.5 per $1000 bonds (less than a 1 point) to $43 per $1000 bonds (4.3 points)
(5) If GM does not receive enough exchange by June 1, 2009, will file for bankruptcy
(6) Exchange expires 11:59PM, Tuesday May 26th
(7) Inserting a call option on non-USD notes
(8) Consummation is conditioned upon: Treasury approval (they believe they need 90% of principal to tender to get approval), U.S. Treasury issued 50% of pro forma common stock in exchange for cancellation of at least 50% of GM’s outstanding treasury debt and cancellation of the Treasury Warrants, evidence that the Treasury will provide an additional $11.6B of funding that GM believe it will need after May 1st, 2009, VEBA modification, U.S. Treasury and VEBA ownership not more than 89% of Pro Forma stock, binding labor modifications.
For more information see -http://www.gm.com/corporate/investor_information/exchange-offer/
23
abril
2009
Increase in Debt Restructuring and Cash Flow Warning
There was a 79% increase in debt restructurings and a 64% increase in cashflow warnings among UK companies in Q4 08 compared with the same quarter in 2007. KPMG research referenced in the The Times, 24th February 2009.
Significantly reduced liquidity in credit markets is putting immense pressure on struggling companies looking to refinance debt and restructure operations. In this new environment a number of new complex capital structures for refinancing debt are being trialled and application of national and international insolvency law is being tested.
16
abril
2009
M&A has ‘only just begun´
Bankruptcy-related M&A has ‘only just begun’
By Brooke Masters in London and Julie MacIntosh in New York
Bankruptcy-related mergers and acquisitions have hit their highest level globally since August 2004, and are set to keep rising as more companies are forced into distressed sales, according to Thomson Reuters data and restructuring practitioners.
Thomson Reuters identified 34 announced deals in March alone, and 67 so far this year, where the target company was in bankruptcy or administration proceedings. The vast majority were in the US or Japan – reflecting the earlier onset of the recession in the US and more liberal bankruptcy rules in both countries, which allow companies to continue operating while they reorganise.
Among the highest-profile deals were those of Delphi , the US car parts maker that recently sold its brakes and suspension business to a Chinese buyer, and BearingPoint, the US technology consultancy that sold its government operations to Deloitte.
Practitioners around the world forecast that the number of transactions involving distressed companies must rise further.
“We’ve only just begun,” said Gregory Milmoe, a US restructuring partner at Skadden, the law firm. “Given the dearth of capital and the substantial increase in the number of companies that will be troubled, one would expect the M&A rate to increase dramatically.”
Richard Stables, global co-head of restructuring at Lazard, said: “People cannot borrow as much as they once could, so you’ve got to figure out how to fill the gap . . . That’s why you may think about selling part or even all of the business.”
Monthly totals for bankruptcy M&A peaked at 87 in July 2002 and slumped to seven in May 2007, just before the credit crunch hit. In the last downturn, a flurry of telecoms and technology company failures led to asset sales to strategic buyers as well as private equity buyers.
This time, industrial and retail companies have been the most prominent distressed sellers but private equity buyers have been few because debt has become far more expensive. Insolvencies traditionally peak a year to 18 months after the start of a recession, so more bankruptcy-related sales are forecast to emerge later this year, practitioners said.
Financial Times – Published: April 12 2009 18:47
