The protest by Seat Pagine Gialle's shareholder funds against the top management of the company inaugurated the decisive week for the company which, despite a cash flow in the order of 4-500 million, risks going into default due to lack of the necessary funds to pay the 52 million interest on the bond (1,3 billion, in the hands of the Luxembourg Lighthouse, today traded at a value of 15 out of a nominal value of 100). The climate has thus immediately warmed up in view of the meeting scheduled for tomorrow between all the parties to the intricate affair that has mobilized top law firms and advisors (a new drain on the company's coffers squeezed in recent years by extraordinary dividends and other levies ) and Thursday's board meeting, perhaps the key stage to avoid the inglorious end of a leading services company.
Why the protest of private funds? The shareholders (Cvc, Permira and Investitori Associati) complain that they have been left on the sidelines of the negotiations that Seat has carried out, with moderate success, with the creditor banks and with the bondholders.
In fact, payment of 100 million was agreed with the latter (in the form of a new bond) plus the conversion of the remaining 1,2 billion into shares. The banks (this is the reasoning of the funds, 49,8% strong, as a guarantee to the creditor institutions) seem willing to re-discuss the times and methods of the debt (approximately 600 million, divided into tranche A, with repayment of 35 million this year and for 149 million in 2012, and a tranche B of 447 million with repayment in 2013). The obstacle of interest has also been overcome: Seat Pg will pay them regularly until the debt is reduced below 450 million, then the coupon will return to the shareholders.
But in the talks, so far, the stumbling block of the exchange value of the Lighthouse bond, controlled by various hedges, Alden Capital, Anchorage, Marathon, Monarch, Owl Creek, Sothic Capital, has not been addressed. For the shareholders, 75 per cent of the capital should go to Lighthouse, after guaranteeing the current shareholders (not only the private ones but also at least 200 minor shareholders) the possibility of increasing the share capital thanks to free warrants to be invoked upon the achievement of objectives set yourself. Lighthouse, by contrast, claims 95. As for the warrants, no foreclosure as long as they are paid.
In short, the parties remain distant. Also because, according to the criticism of the funds, the company has preferred to set the issue aside by addressing other issues. With the result of putting the shareholders in an awkward position: either they give up their requests or they risk assuming the responsibility for having sunk Seat Pg. In the meantime, the company makes it known that in the absence of an agreement between all the parties it will not pay the interest in order not to expose itself to the risk of disputes and appeals.
In short, the climate is not the most peaceful even if, in truth, no one has an interest in derailing the negotiation which could be postponed by a month beyond the maximum time thanks to the 30-day "remedy period", a period in which they can therefore continue any negotiations, even without having paid the coupon.
