hibu suspends loan payments to complete balance sheet restructuring

By Caroline Salls

Pittsburgh, Nov. 7 - hibu plc has decided to suspend all future payments of principal and interest to its lenders until a balance sheet restructuring can be completed, according to a company news release.

As a result, hibu said no payments are expected to be made to any term loan lender under the facilities agreements dated Nov. 30, 2009; and no payments are expected to be made under a facilities agreement dated April 27, 2006, other than incentive-related payments tied to amendments sought from the lenders.

In light of this decision, the company said it is seeking a number of waivers, consents and amendments from its lending group to allow the restructuring discussions to proceed.

According to the release, the CoCom has unanimously agreed to support these waivers, subject to credit committee approval. The CoCom holds, manages or has a beneficial interest in 24%, or £537.3 million, of the debt under the company's 2009 facilities agreement.

In addition, the group said it has decided to cancel its undrawn and unavailable revolving credit facility.

According to the release, the waivers, consents and amendments will require the approval of lenders holding two-thirds of the debt by value under the 2009 facilities agreement and the approval of lenders under the 2006 facilities agreement.

The group said it currently intends to launch one or more schemes of arrangement under part 26 of the Companies Act 2006 to give effect to necessary arrangements if an inadequate number of lenders vote in favor of the proposed waivers' consents and amendments.

In addition, hibu said some of the 2006 lenders might file actions to recover up to £65 million due to them in connection with the suspension of payment.

The company said these actions could include a petition for the winding-up of the relevant borrowing entities.

hibu said it plans to deal with any amounts due under the 2006 facility as part of the overall restructuring process and does not believe that any legal action by any 2006 lender has merit or should delay or significantly impede the broader restructuring process.

The group also said it has healthy cash balances.

Reading, United Kingdom-based Hibu, formerly Yell Group plc, is a multinational directories and internet services company.

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