CHAMP-backed Blue Star bail-out approved by bondholders

Under the terms of the restructuring package, the bondholders will write off NZ$32.5 million ($26.7 million) of unpaid accrued interest on their $105 million worth of bonds and swap the principal into two tranches. The first tranche of NZ$67.5 million won't pay interest until 2013 while the second tranche of NZ$37.5 million pay no interest but can be converted into equity at a later date.

The bondholders earlier objected to CHAMP's portion of the package, a $15.6 million shareholder loan note with a coupon of 18.5%, being ranked above the bonds in settlement terms. It was subsequently reported that Blue Star offered bondholders the opportunity to subscribe to the shareholder loan alongside the private equity firm. It is unclear whether this actually happened.

The remainder of the restructuring package comprises $10 million in working capital supplied by banks, who have also agreed to allow Blue Star more time to repay its NZ$195 million in outstanding debt.

Nat Childres, a CHAMP representative, noted that the private equity firm is already NZ$175 million down on its initial investment in Blue Star. CHAMP  acquired an 84% stake in Blue Star for NZ$385 million in 2006. In March of this year, it was reported to have made an additional capital contribution, although no details were forthcoming.

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• Topics
• Australasia
• Restructuring
• Industrials
• CHAMP Private Equity