The company recently attempted a debt-for-equity exchange but it was rejected by a group of bondholders. Under terms of the rejected offer, holders of its US$414.5m 10.25% senior subordinated notes due 2009 and US$155m subordinated notes due 2011 were offered the opportunity to swap into US$260m in new 11.25% senior subordinated notes and warrants convertible into a 20% stake in the company. But the bondholders want more.
The company is currently under technical default after failing to make a payment on its 10.25% senior subordinated notes due 2009 last Monday. The publisher could file for bankruptcy if it fails to reach an agreement with its creditors during the 30-day grace period provided for under the terms of the notes.
As part of the debt-for equity proposal the company is negotiating an amendment on its US$459.6m JP Morgan-led credit facility.
American Media is currently undergoing discussions with its creditors regarding a financial restructuring of the company. The company is required by its bank indentures to have a plan in place by February 1 to refinance its US$414.5m 10.25% senior subordinated notes due 2009. The company also has US$155m in subordinated notes due 2011.
The four banks are on the hook to finance the US$1.12bn aggregate cash portion of the transaction. The deal values GW at about 4.3x 2009 Ebitda. Also backing the transaction are US$400m 144a senior notes due 2016.
Precision agreed to pay US$9.00 per share for Grey Wolf, comprising US$5.00 in cash and 0.1883 newly issued trust units for each GW common share. In June, however, when natural gas prices were higher, Grey Wolf’s board of directors rejected an unsolicited bid by Precision Drilling of US$10.00, opting instead for a merger with Basic Energy Services. Grey Wolf shareholders then voted against the Basic Energy merger, setting the stage for another lower offer by Precision Drilling.
GE has provided a US$250m plan of reorganisation credit facility for
Other borrowers are using cash to repay debt.
Neither Energy Future nor TCEH had any immediate need for the additional liquidity. It will use the availability under the revolver as a precautionary measure against difficult market conditions. If financial conditions worsen, the company said, it may tap the repaid funds again.