EA Partners noteholders to vote on Air Berlin and Alitalia debt bids

By Caroline Salls

Pittsburgh, Oct. 9 – EA Partners I BV’s and EA Partners II BV’s noteholders are scheduled to vote on two debt remarketing proposals at meetings scheduled for Oct. 31, according to notices released Monday.

The meetings will be held for holders of EA Partners I’s $700 million of 6 7/8% notes due 2020 and EA Partners II’s $500 million of 6¾% notes due 2021.

EA Partners announced in July that a firm bid was received for the defaulted debt obligations related to its Air Berlin debt and 6¾% Alitalia notes due 2021, with an initial purchase price of $1,800,001 and an earn-out component.

However, Monday’s notices said the purchase price of that bid, together with funds available in the company’s liquidity pool, was insufficient to partially redeem the notes at par, which is required to complete the sale of the Alitalia notes.

As a result, the sale of the Alitalia notes was not completed, and an event of default and acceleration occurred in August.

EA Partners said an improved bid was received, the terms of which were revealed to the noteholders on Aug. 28.

The noteholders will be asked at the hearings to select either the initial bid terms or the revised bid terms.

Since the bid terms do not explain how any proceeds received are to be distributed to the EA Partners entities, the company has proposed that any proceeds received be split based on the total amount of defaulted debt obligations outstanding, which is $263.84 million for EA Partners I and $199 million for EA Partners II.

EA Partners I said it does not intend to use the proceeds from any sale to partially redeem its notes, nor does it plan to reset the interest rate payable on the notes.

At the meetings, the noteholders will also vote on allowing the indenture trustees to file claims in Air Berlin and Alitalia’s insolvency proceedings.

Alitalia is an airline based in Rome. The company filed bankruptcy on June 12, 2017 in the U.S. Bankruptcy Court for the Southern District of New York under Chapter 15 case number 17-11618.

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