Only 35 per cent of bondholders at yesterday's meeting in London voted in favour of postponing interest payments on their bonds. Those present spoke for pounds 78m of Heron bonds. The bonds - pounds 300m in total - now trade at a fraction of their face value.
There is considerable anger that pounds 50m of City advisers' fees appears to have been wasted in the first restructuring, now that a second restructuring is necessary. Last year's revamp fell apart after a plunge in the Spanish property market, where Heron has considerable assets.
But apart from a vocal minority, the company and its creditors agree that there is no point in putting Heron into receivership.
Heron's adviser, UBS, is talking to at least six parties interested in buying all or part of the group. The company is hopeful a deal can be clinched before the end of June. But any deal will have to be agreed by the company's banks.
This poses two problems. The banks are far better secured than the bondholders, and so are able to reject offers that the bondholders might favour. And the banks have a deep aversion to the most popular solution for Heron's problems, a debt for equity swap to relieve the company of its untenable interest burden.
The gulf between the banks, led by Barclays, and the bondholders was emphasised yesterday when it emerged that the Heron Corporation (HCP) subsidiary has been making payments to the banks months before they are due. Last November pounds 150m was paid to HCP's 40 banks although it was due this March, and last week saw payment of a pounds 67m portion of pounds 160m due next March.
Whatever the outcome, Mr Ronson's position is stronger than it might appear, as he is recognised by the banks and most of the bondholders as probably best-placed to sell off Heron's remaining properties.Reuse content