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Blue Star bond holders approve debt restructuring


Wednesday 10th August 2011

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The future of printing company Blue Star Group looks brighter after bond holders approved a debt restructuring today.

The future of the company that employs 800 workers in New Zealand had been in doubt ahead of the vote.

Bondholders voted 76.9 percent in favour of the refinancing proposal, surpassing the required 75 percent approval. The approval was the final hurdle of a refinancing.

"A cloud has been lifted from the company," managing director Chris Mitchell said.

The package includes the extension by senior lenders of existing funding lines, the provision of further liquidity and the easing of covenants, plus the provision of $15 million in new funding by the group’s principal shareholder.

"The board appreciates the decision of bond holders to give this company time to demonstrate that it can deliver on the repositioning and restructuring that it is undertaking to drive higher levels of earnings," Mitchell said.

Under the terms of the deal bond holders will receive their first interest payment in October 2013.

Bondholders were asked to forgive $32.3m in unpaid interest on their bonds since payments were suspended in August 2009 and to convert two-thirds of their $105m in $1 bonds into amended capital bonds at 64c. The other third is to be converted into limited recourse, subordinated participating bonds.

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