HBOS and the Reuben brothers have linked with ADM Capital to offer about £60m of new funds in exchange for majority control of McCarthy & Stone.
People close to the situation said holders of senior debt would have to write off more than half their debt claims as part of the proposal, leaving the company with less than £267m of cash-interest bearing debt after the restructuring.
New funds would be used to provide lenders with a cash exit to reduce their exposure if they wanted. Junior creditors would write off debt in exchange for a share of the remaining equity after a restructuring.
The three would get more than half of the retirement homes builder for providing the new funds. Lenders have agreed a “stand-still” arrangement until March to avoid a breach of covenants.
12/01/09 Financial Times 18
