Sea Containers edges nearer to bankruptcy
Sunday 15 October 2006
Sea Containers, the stricken owner of rail company GNER, could file for Chapter 11 bankruptcy protection in the US as soon as tomorrow after crisis talks stalled over its pension deficit.
The impetus for the filing would be a $115m (£62m) bond payment due today. "They aren't going to make the payment," said a source. "They will file rather than let somebody do it for them."
The company, led by Bob MacKenzie, has been holding marathon discussions over the weekend. "We have every intention of continuing to trade," said a spokeswoman. "We are in survival mode, but we see a way through this."
The company's pension deficit, however, is likely to dash any attempted deal to avert bankruptcy, sources said. Bankers Houlihan Lokey Howard & Zukin and law firm Bingham McCutchen hosted a bondholder conference call on Friday to discuss the pension deficit, which as of December last year stood at $88m. Creditors were told on the call that the company's liability could double to at least $175m if the UK pension regulator decided to wind up the pension fund.
If it does, the regulator could then invoke a clause of the Pensions Act under which Sea Containers would have to find an outside insurance company to buy the liabilities. As an effective fire sale, that would push the price up, so causing the deficit to rocket.
Houlihan Lokey and Bingham McCutchen are leading an ad hoc group of creditors but have not been hired yet. Rather, they are angling to represent a creditors' committee if one is formed. So far, bondholders have been hoping for a deal to avoid a court restructuring.
Sources said there was still a chance that such major American hedge fund investors as Appaloosa Management, Newcastle Partners or Reed Conner & Birdwell could yet inject cash in exchange for a large stake in the business.
- 1 Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
- 2 Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
- 3 Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
- 4 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 5 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
Jennifer Lawrence: Leaked 4Chan sex video branded 'fake' by users
Jennifer Lawrence 'naked sex video' will be leaked next, threatens 4Chan celebrity photo hacker
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...