VIENNA, March 9 (Reuters) - Creditors of Austrian “bad bank” Heta, who say they control more than 5 billion euros ($5.5 billion) of its bonds, on Wednesday again rejected a discounted buyback offer by Heta’s home province of Carinthia.
The group said it would not cancel a lock-up agreement which binds all its members to reject any buyback offer for less than the nominal value of the bonds which amounts to around 11 billion euros that are still guaranteed by Carinthia.
A two-thirds majority is required for the buyback to take effect, at which point it would also be binding on hold-outs, but such an outcome seems a distant possibility and lengthy court battles loom over the future of Heta’s debt.
Creditors have to inform the tender agents by 1600 GMT on Wednesday about their decisions so the information can be processed in time for the final 1600 GMT deadline on Friday.
“There is a major lack of understanding by the creditors regarding the fact that Carinthia refuses to talk,” the group said in a statement.
“The creditors remain ready to have discussions and again call on all decision-makers of the federal government and the Province of Carinthia to enter into constructive negotiations for a timely settlement of the dispute.”
Carinthia has offered to buy back senior bonds, the bulk of the paper, for 75 percent of their face value and junior bonds for 30 percent. The province which says it faces bankruptcy should the offer fail, has said it is prepared to go to the highest courts to fend off creditors’ claims.
$1 = 0.9113 euros Reporting by Shadia Nasralla; Editing by David Clarke and Mark Potter