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Unigel is pitching a restructuring deal to bondholders led by PIMCO to avoid filing for bankruptcy protection, according to sources. The deal involves injection of $100mn in new money and would allow the company to restructure its debt out of court. In order to start the restructuring, the company needs support of one-third of bondholders post which, it will have a 90 days period to gather support of more than 50% of bond investors. Under the plan, bondholders have an option to exchange 30% of their existing bonds into senior debt and 40% into subordinated debt. The remaining 30% of the debt would be exchanged into 50% of Unigel’s equity for the creditors who inject new money. Over the last year, the company has missed coupon payments on its dollar bond and has also breached debt covenants.
Its 8.75% 2026s trades at distressed levels of 25 cents on the dollar.
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