Elektrim considering debt options
Bondholders threaten new bankruptcy motion
Troubled telecom and energy group Elektrim is dragging its feet in negotiations to repay defaulted bonds, according to a spokesman for a group of the bondholders. Elektrim has not yet sent proposals it promised to angry bondholders that would begin court-ordered mediation talks on repayment, said Jarek Golacik, a vice president of the London-based asset-management company Centaurus Capital Limited, who is acting as spokesman for a group of bondholders holding more than 75% of the defaulted issue. "It's not the first time that the company said they would do something and didn't," Golacik said. "So far it seems like (Elektrim's) management is not interested in proceeding and is doing everything to stall it." Elektrim had not contacted Law Debenture Trust Corp., the London-based trustee that had filed a court petition against the Polish concern on behalf of the bondholders, to begin the mediation talks, Golacik said. The group of bondholders filed the petition in a Warsaw court in early January calling for Elektrim's bankruptcy after the concern defaulted on the repayment of 480 million ($412.8 million) worth of unsecured bonds in December. The Warsaw court dismissed the petition Jan. 16 and ordered Elektrim to begin composition - or debt-restructuring - proceedings to repay its bondholders. Last Monday, Elektrim's chief executive officer, Waldemar Siwak, said that within a few days he would send some proposals for creating a negotiating team to Law Debenture Trust Corp. Following a supervisory board meeting last Wednesday, Elektrim issued a statement that the board had "reviewed the financial situation of Elektrim and the process of the composition proceeding and (would) continuously monitor the process as a key priority for the company." No reasonable explanation A press office employee at Elektrim on Friday declined to say when Elektrim would send the proposals to Law Debenture Trust Corp. but added that the firm's management board would issue an official statement when the proposals were sent. When asked why the company's official statement and press releases about the bondholders' bankruptcy petition and the composition had not been posted on Elektrim's Web site, he said that the firm was "working on that" and that there was "no reasonable explanation" why the information was not posted. Elektrim's last press releases and official statements posted on its Web site are dated Nov. 12, 2001. Golacik said he was surprised that Elektrim still hadn't made an offer, especially after the court hearing last month when Siwak said Elektrim was prepared to give bondholders a better repayment deal. In January, Elektrim filed a court petition proposing a 40% reduction of its debt and a three-year grace period for repaying the remainder. During the court proceedings, however, Elektrim stated that its assets, estimated at zł. 3.2 billion ($780 million), were greater than its liabilities of zł. 2.2 billion ($540 million). Full and prompt Bondholders are still calling for the "full and prompt repayment" of the debt, Golacik said. The Warsaw court is scheduled to convene Feb. 13 when Elektrim must present a list of its creditors and the amounts they are owed. If the creditors reject Elektrim's settlement offer the court would automatically close the composition procedure and they would be able to file a second bankruptcy petition. "When the time comes and there is no other offer on the table, we will vote this composition down and if necessary put the company into bankruptcy," Golacik said. Elektrim's statement on Wednesday also said that its supervisory board suspended Vice President Jacek Walczykowski due to "the differences of opinions relating to the composition proceedings." According to press reports, Walczykowski favored a shareholders proposal led by Poland's BRE Bank to call a general meeting of Elektrim's shareholders this month to appoint new board members and devise a plan to repay bondholders. Elektrim has set the meeting for May 25. A local press report last week said Elektrim would hold another supervisory board meeting Tuesday and that a new president might be selected. Elektrim declined to comment on the report.
Troubled telecom and energy group Elektrim is dragging its feet in negotiations to repay defaulted bonds, according to a spokesman for a group of the bondholders. Elektrim has not yet sent proposals it promised to angry bondholders that would begin court-ordered mediation talks on repayment, said Jarek Golacik, a vice president of the London-based asset-management company Centaurus Capital Limited, who is acting as spokesman for a group of bondholders holding more than 75% of the defaulted issue. "It's not the first time that the company said they would do something and didn't," Golacik said. "So far it seems like (Elektrim's) management is not interested in proceeding and is doing everything to stall it." Elektrim had not contacted Law Debenture Trust Corp., the London-based trustee that had filed a court petition against the Polish concern on behalf of the bondholders, to begin the mediation talks, Golacik said. The group of bondholders filed the petition in a Warsaw court in early January calling for Elektrim's bankruptcy after the concern defaulted on the repayment of 480 million ($412.8 million) worth of unsecured bonds in December. The Warsaw court dismissed the petition Jan. 16 and ordered Elektrim to begin composition - or debt-restructuring - proceedings to repay its bondholders. Last Monday, Elektrim's chief executive officer, Waldemar Siwak, said that within a few days he would send some proposals for creating a negotiating team to Law Debenture Trust Corp. Following a supervisory board meeting last Wednesday, Elektrim issued a statement that the board had "reviewed the financial situation of Elektrim and the process of the composition proceeding and (would) continuously monitor the process as a key priority for the company." No reasonable explanation A press office employee at Elektrim on Friday declined to say when Elektrim would send the proposals to Law Debenture Trust Corp. but added that the firm's management board would issue an official statement when the proposals were sent. When asked why the company's official statement and press releases about the bondholders' bankruptcy petition and the composition had not been posted on Elektrim's Web site, he said that the firm was "working on that" and that there was "no reasonable explanation" why the information was not posted. Elektrim's last press releases and official statements posted on its Web site are dated Nov. 12, 2001. Golacik said he was surprised that Elektrim still hadn't made an offer, especially after the court hearing last month when Siwak said Elektrim was prepared to give bondholders a better repayment deal. In January, Elektrim filed a court petition proposing a 40% reduction of its debt and a three-year grace period for repaying the remainder. During the court proceedings, however, Elektrim stated that its assets, estimated at zł. 3.2 billion ($780 million), were greater than its liabilities of zł. 2.2 billion ($540 million). Full and prompt Bondholders are still calling for the "full and prompt repayment" of the debt, Golacik said. The Warsaw court is scheduled to convene Feb. 13 when Elektrim must present a list of its creditors and the amounts they are owed. If the creditors reject Elektrim's settlement offer the court would automatically close the composition procedure and they would be able to file a second bankruptcy petition. "When the time comes and there is no other offer on the table, we will vote this composition down and if necessary put the company into bankruptcy," Golacik said. Elektrim's statement on Wednesday also said that its supervisory board suspended Vice President Jacek Walczykowski due to "the differences of opinions relating to the composition proceedings." According to press reports, Walczykowski favored a shareholders proposal led by Poland's BRE Bank to call a general meeting of Elektrim's shareholders this month to appoint new board members and devise a plan to repay bondholders. Elektrim has set the meeting for May 25. A local press report last week said Elektrim would hold another supervisory board meeting Tuesday and that a new president might be selected. Elektrim declined to comment on the report.
