Global A&T holders reject plan to restructure $625 million 10% notes

By Susanna Moon

Chicago, Aug. 3 – Global A&T Electronics Ltd. is holding talks with an ad hoc group of holders of its $625 million 10% notes issued Feb. 7, 2013 after members of a steering committee unanimously rejected a July 25 proposal to restructure the debt, according to a press release by the members of the steering committee of noteholders.

The advisers to the steering committee received the following proposed terms from Moelis & Co., the company's investment banker:

The reorganized company’s capital structure under July 25 proposal is as follows:

• The take-back notes: $650 million first-lien senior secured notes with an interest rate of 7% and holders of old notes receive $531 million, or about 85% of face amount of old notes, and holders of new notes receive $119 million; and

• For the reorganized company equity, holders of old notes receive nothing, holders of new notes 10% and equity sponsors 90%.

The steering committee said its members “look forward to continuing negotiations with the company's advisers and hope to reach agreement on the terms of a restructuring with the company and the equity sponsors.”

The steering committee as well as the ad hoc group is represented by Milbank, Tweed, Hadley & McCloy LLP and PJT Partners.

Fitch Ratings said on Aug. 1 that it downgraded Global A&T Electronics Ltd.'s (GATE) long-term foreign-currency and local-currency issuer default ratings to C from CC.

The downgrades reflect news that GATE is unable to pay the semiannual coupon of $56 million on its $1.1 billion notes due that day and entered into a 30-day grace period, according to the ratings agency.

The company was holding talks with some bondholders about restructuring its debt, the agency added.

Before that on May 18 Global A&T said the Supreme Court of the State of New York denied its motion to dismiss a bondholder lawsuit.

The company said it intends to appeal the order to the Appellate Division of the Supreme Court of the State of New York, First Judicial Department.

As previously reported, the complaint was filed by two holders of the company’s 10% senior secured notes due 2019.

The lawsuit makes claims related to the issuance of additional notes in connection with an exchange completed by Global A&T on Sept. 30, 2013.

Global A&P parent company UTAC Holdings Ltd. said in an April 5 release that the claims made in the complaint appear to be similar to the claims being asserted by other noteholders in a lawsuit filed in the New York State Supreme Court in February 2014, which is pending.

Global A&T is a Singapore-based semiconductor company.

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