The Seat Board of Directors is convened for tomorrow and will have to take a crucial decision for the reorganization of the group, which is burdened with 2,7 billion in debt. The meeting, writes Radiocor, will be held tomorrow morning and will have to evaluate whether to repay the 52 million six-monthly coupon of the Lighthouse bonds maturing on November 30th.
The Board could decide not to repay the bond, creating the conditions for the technical default, or authorize the repayment: in this case, if the negotiations between shareholders, bondholders and senior creditors were to fail at a later time, the creditors would have the possibility to put forward the hypothesis of preferential bankruptcy vis-à-vis the company, for having used resources to pay off a non-senior debt a few days before default.
The draft agreement between Seat, banks and holders of the Lighthouse bond, announced last Thursday, provides that each
bondholder undertakes to pay its share of the coupon into a secured account; that this secured account is used to purchase debt from Credit Support Providers (creditor banks); that the company finances Lighthouse SA in order to pay the coupon. The agreement also provides for a rescheduling of the bank debt, limits on the distribution of dividends, a commitment to convert 1,2 billion of Lighthouse into shares and to issue a senior bond for the remaining 100 million. For the agreement to be enforceable, it must be approved by Seat's Board of Directors, by the banks, and by 75% of the holders of the Lighthouse bond.
