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McAleese reaches recapitalisation plan

The debt deal with SC Lowy includes a $26m capital raise and a delisting of the troubled company.

Troubled Australian transportation group McAleese has finally secured a recapitalisation plan with Hong Kong debt seller SC Lowy after 10 suspensions of the proposed agreement.

According to a statement, the company has entered a consortium led by SC Lowy and its investors, BlackRock and Remagen Nominees. Under the consortium, McAleese will pay $112.3 million in exchange for wiping out most of its existing senior debt. The amount is around $200 million, according to a local press report.

“The announcement of the recapitalisation represents an important milestone for McAleese, establishing a stable platform from which to service our customers and invest in the business,” said Don Telford, McAleese’s chairman.

The $112.3 million will come through $16 million in cash, $91.3 million in the acquisition of McAleese’s senior debt and a future $5 million to be paid by the company, which is deferred for up to 12 months after the date of the senior debt acquisition.

Secondly, McAleese will proceed with a $26 million underwritten pro-rate entitlement offer of subordinated, secured convertible notes to shareholders. If McAleese shareholders do not subscribe for their entitlement of notes under the notes Issue, then they will be materially diluted by the conversion of the notes.

The SC Lowy consortium will receive options entitling it to a 35 percent stake while also mandating a delisting of McAleese.

“Today’s announcement is the result of an extensive process, conducted over several months with the forbearance of our bank group. While the outcome is a disappointing one for existing providers of both debt and equity, we are pleased that shareholders will have the opportunity to consider, and participate in, the recapitalisation,” he added.

The trading of the company’s shares was also resumed last Tuesday after the announcement.