Thursday 22 February 2018

Senior lenders to decide on bid to unblock £1bn NIE sale

Donal O'Donovan

Donal O'Donovan

The Middle Eastern owners of Northern Ireland Electricity (NIE) parent company Viridian hope to restart a stalled £1bn sale to the ESB by separating the deal from their own struggling refinancing efforts.

The sale has been blocked since September -- with senior and junior lenders bitterly divided on how the proceeds should be split.

Junior lenders want a share of the proceeds -- earmarked to repay some of Viridian's £1.8bn in debt -- but senior lenders insist they are first in line.

Lenders have a veto because Viridian tied the ESB deal to a complicated refinancing of some £800m it cannot repay from the sale money. It means unanimous lender agreement is needed to get the deal done.

An adviser acting on the deal told the Irish Independent the company has come up with an alternative two-step plan -- in which the sale and refinancing will be separated out.

Viridian reckons a sale could be approved by a vote of only the most senior lenders, with junior lenders forced to accept the deal by "deemed consent" if the company can show they are not materially damaged.

Viridian has tried to sweeten the pill by creating a £200m pool to settle some junior debt.

Half will be paid in by the company but half would come from the ESB purchase price.

Senior lenders -- previously in line for all of the money -- have been asked to consider the new plan by tomorrow. If an informal poll of seniors looks favourable, the company will press ahead. Viridian is owned by Bahrain-based Arcapita.

Irish Independent

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