FRANKFURT (Reuters) – Creditors of German cable provider Tele Columbus plan to take over the company’s indebted parent to try and recoup some of their investment, several people familiar with the matter said on Tuesday.
The creditors are set to announce on Wednesday plans to auction off parent Orion Cable, the people said.
The creditors — which include financial investors Alcentra, York Capital and Golden Tree as well as the Bank of Ireland — hope that the auction will put pressure on Orion’s owners to give up the assets.
Efforts to sell Tele Columbus have failed due to lack of interest from potential buyers and the owners — led by London-based financial investor Scott Lanphere — rejected the idea of letting creditors swap debt for equity.
A standstill agreement with creditors on 920 million euros ($1.4 billion) of debt expired at the end of November. The creditors have called the loans, but have not demanded payment, three people familiar with the situation said.
“This (auction) is to be seen as a means to put pressure on Lanphere,” one source said. The auction is being managed by ING (ING.AS).
Lanphere is demanding that creditors give the owners 50 million euros in compensation for lost property if they go through with the auction. Otherwise, the owners will let Tele Columbus slide into insolvency, sources said.
“This is a poker game,” a spokesman for the creditors said.
A spokesman for Tele Columbus declined to comment.
Tele Columbus, together with listed sister company Primacom (PRIG.DE), rank third among Germany’s cable providers and both belong via the holding company Orion Cable to Luxemburg-based Escaline [ESCALC.UL]. (Reporting by Alexander Huebner and Philipp Halstrick; Writing by Maria Sheahan)