BoI exposed to German firm
Published 17/09/2010 | 05:00
Bank of Ireland, the country's largest bank, is among lenders awaiting crucial debt restructuring talks at a major German cable company which might mean losses for the bank.
Tele Columbus, based in Hanover, is Germany's third-largest cable television company, with more than three million subscribers, and it now plans to seek to restructure about €1bn of loans with a variety of lenders, among them Bank of Ireland.
A scheme of arrangement for the company is expected to be proposed in a UK court next week. Lenders are expected to be offered equity in the company in exchange for agreeing to write down some of the debt.
Other lenders are believed to be York Capital Management, a New York-based hedge fund and GoldenTree Asset Management, another hedge fund specialising in high-yield debt and leveraged loans.
Bank of Ireland is in the strongest position to absorb loan losses, or take equity in distressed companies, as it is now the best capitalised bank in the Irish market.
According to yesterday's closing prices, the bank had a market capitalisation of €3.5bn.