By Andrew Starke
After perhaps the biggest corporate bun-fight in the history of Australian hospitality, Redcape’s debt-raiders from New York may find themselves out of the game.
In a surprise twist, the board of the most high-profile, debt-stricken hotel group in the country has announced an end to the much criticised offer by the investor group comprising of York Capital Management, Varde Partners, Goldman Sachs (Asia) Finance.
The plan to buy 100 percent of Redcape Property Group’s (RPG) securities for $0.08 and re-finance the Senior debt was dependent on Junior lenders ANZ and BOSI agreeing to the offer of 30c in the dollar for their $62 million.
After receiving notification on the afternoon of the deadline that the Juniors will not be accepting, and both the Juniors and the investor group advising that the ‘Junior Condition Precedent cannot be satisfied’, the board had little choice but to call a halt to trading while it obtained advice and considered its position.
However, the manager has also announced that a new deal is in the wind, with an as yet unnamed party ‘developing a possible alternate recapitalisation proposal’.
The mystery investors have apparently already reached a binding agreement with the Junior lenders and intend purchasing 100 percent of RPG securities for $0.10, which represents a 66 percent premium on the closing price as trading halted.
The new deal must determine a resolution to the September 30 deadline for debt amortization or risk RPG slipping into liquidation.
Holding 39 percent of the Senior debt, the investor group has been able to prevent the sale of existing assets while a deal is in discussion, but the pressing need for cash may see individual properties come onto the market shortly.