'Hopeful' bondholders still can't solve Elektrim dispute

Elektrim's talks with bondholders have taken on more positive overtones, although the financially strapped telecom and energy firm still has not indicated that it would yield to demands to issue full and prompt repayment for €480 million worth of its defaulted bonds, the bondholders' spokesman said last week. "The last round (of talks) was constructive but no solution has been found," said Jarek Golacik of Centaurus Capital Limited, a London-based asset-management fund, who is acting as the bondholders' spokesman. "(Bondholders) are hopeful that a solution within our framework will be found." No date has been set for another meeting, Golacik said. Elektrim spokeswoman Ewa Bojar declined to comment. Earlier last week bondholders rejected Elektrim's new debt settlement proposal that creditors owed up to zł. 200,000 be repaid in full, while others would receive 85% of their amounts payable over the next several years. News of the proposal compelled bondholders to break their silence on the talks after they decided two weeks ago to refrain from speaking to the press in order to give Elektrim some breathing space. Elektrim had been unwilling to meet with bondholders to discuss alternative repayment options until about mid-February after the conglomerate defaulted on the bonds last December.

Also at last week's meeting Elektrim did not discuss the matter of the additional compensation that bondholders are seeking for the payment delay, Golacik said. "It doesn't look like Elektrim is thinking about additional compensation," said Andrzej Kasperek, a telecoms analyst at COK Banku Handlowego. "(It) doesn't have a proposal for the full repayment and first of all (the bondholders) need to get full repayment." Bondholders stated previously that they would file a second petition for Elektrim's bankruptcy if the firm did not issue full repayment as part of a debt settlement plan to be accepted or rejected by creditors in a meeting on April 23 in the Warsaw court that is supervising the conglomerate's debt-restructuring process. They filed the first petition for the company's bankruptcy in January. Elektrim owes its creditors a total zł. 2.33 billion ($568 million). In addition, Elektrim's shareholders will meet at an extraordinary shareholders meeting on Wednesday to replace members of the firm's supervisory board. BRE Bank, which holds about 15% of Elektrim's shares, is seeking to put its own members on the firm's board - a move that could speed up a resolution with bondholders and other creditors and spare the company from bankruptcy. Last month, BRE and Dutch investment group Eastbridge signed an agreement to form a consortium to acquire a 49% stake of Elektrim's telecom arm, Elektrim Telekomunikacja (ET). According to press reports last week, BRE also wants to acquire Elektrim's power holdings, including its 38.5% stake in Pątnów Adamów Konin (PAK), Elektrim's most valuable power asset. Bojar would not comment on any talks between Elektrim and BRE.