Gerald Ronson could remain in the driving seat at Heron if new rescue proposals get the nod from banks and bondholders, writes Karen Lennox.
HNV Acquisition, the US-backed team which stepped in with a rescue plan earlier this year, has worked up detailed proposals with its adviser, Swiss Bank Corporation. Now it is courting favour from Heron’s backers and inviting Gerald Ronson to remain on the new board.
Disgruntled Heron International bondholders, who have forfeited interest payments since the first financial restructuring a year ago, are now being offered an exit route. HNV Acquisition will pay 45% of the face value of each Senior bond held and 6%, or 40, HNVA shares for every Junior bond. Common shareholders will be offered £7.50 per share or five HNVA shares. The deferred interest will not be paid.
The US consortium, headed by Samsonite luggage magnate Steven Green and with backers including Rupert Murdoch and the family trusts of junk bond king Michael Milken, is stumping up £142m to fund the offer. HNVA will end up with a 51% stake in the rejuvenated group and Green, with Steven Fink, will become executive directors.
In the year to March, Heron’s losses including exceptional items were £92.3m (£218.8m) The deficit on shareholders’ funds rose to £172m. Properties were valued at £312.5m, with £235m of investments and £62.9m of trading properties. The company’s board, advised by UBS, is recommending the offer on the grounds that, if it falls through, receivership would be “highly probable”.
