The chief goal of this case is to analyze some of the typical issues that arise in a complicated debt restructuring process. Pupils are requested to identify with differently-oriented stakeholders involved in the deal, with the aim of understanding dynamics among them, varied perspectives, and get a deal and consequent efforts needed to align different positions. The period is among the most difficult recent pan-European restructurings, and the largest out-of-court deal in Europe. Between March 2011 and September 2012, SEAT and its fiscal creditors negotiated at length to find a consensual deal aimed at stabilizing its distressed capital structure.
The approx. €2.7 billion financial indebtedness finally restructured dated back to 2003, when the Company was the objective of a secondary leveraged buyout performed by a private equity association (BC Partners, CVC, Permira and Investitori Associati) which took over SEAT from Telecom Italia. The Business had tried to pursue softer options before getting into tough restructuring negotiations. The restructuring was completed in September 2012, and provided for the following: i) an enormous debt-for-equity swap. (The whole €1.3 billion Lighthouse bond was exchanged for 88% of the Company's fully diluted equity, plus a brand new senior bond) ii) The issuance of a new €65 million senior secured bond identical to the SSB to the Lighthouse bondholders and iii) a comprehensive renegotiation of terms and conditions of the Senior Bank Facilities.
Publication Date: 10/30/2013
This is just an excerpt. This case is about Accounting
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