[Berlin/Cologne, ] On Wednesday, 18 May 2016, creditors of HETA ASSET RESOLUTION AG (HETA) entered into a so-called memorandum of understanding (MoU) with the Republic of Austria on the restructuring of debt obligations of HETA (HETA Debt Instruments) secured by a deficiency guarantee of the Province of Carinthia. The 72 creditors who are parties to the MoU hold and/or control EUR 4.938 billion in HETA Debt Instruments. These include senior creditors with a total amount of HETA Debt Instruments of EUR 4,828 billion and subordinate creditors with a total amount of HETA Debt Instruments of EUR 109.9 million.
In accordance with the MoU, it is intended that Kärntner Ausgleichszahlungsfonds (KAF) will submit a new public tender offer based on § 2a of the Austrian Financial Market Stability Act (FinStaG) for the repurchase of the HETA Debt Instruments. An initial tender offer under § 2a FinStaG made by KAF and published in January 2016 failed to obtain sufficient acceptance majorities. The new tender offer permits creditors to opt for either a cash payment of 75 % (for senior HETA Debt Instruments) and 30 % (for subordinate HETA Debt Instruments) or an exchange of the HETA Debt Instruments for zero coupon bonds that are to be newly issued. The zero coupon bond will be secured by a federal guarantee and will have a term of about 13.5 years. Further details on the terms of the tender offer are available at https://www.bmf.gv.at/aktuelles/Excerpt_of_the_MoU.PDF?5eylgj. The issue of the tender offer is still subject to various terms and conditions, among these the creation of a necessary legislative basis as well as state aid law review of the transaction by the European Commission. It is planned that the tender offer will be published at the beginning of September 2016, with completion occurring in mid October 2016.
The parties to the MoU include a majority of the members of the par investor pool, who were advised on the negotiations of the MoU by GÖRG Partnerschaft von Rechtsanwälten mbB (GÖRG) in cooperation with Austrian law firm Dorda Brugger Jordis Rechtsanwälte GmbH (DORDA), Vienna. The speaker for the pool is Dexia Kommunalbank Deutschland AG, which is the largest single creditor in the pool and holds claims totalling EUR 395 million. In the course of negotiating the MoU the members of the par investor pool consulted intensively with other creditor groups and their advisors.
The creditors in the par investor pool (banks, in particular mortgage-lending institutions, insurers, asset managers and public corporations), which is organised in the pool under a pool agreement, hold about EUR 1.5 billion in bonds and Schuldschein loans issued by HETA and its legal predecessor in the years 2002 to 2007. Alongside HETA, the Province of Carinthia and/or Kärntner Landesholding are liable for the claims of the creditors on the basis of a statutory liability guarantee.
GÖRG already oversaw the formation of the creditors into a pool and, together with DORDA, advised the par investor pool on the collective defence of its rights in Austria in “objection” appeal proceedings brought there against the moratorium imposed by the Austrian Financial Market Authority on 1 March 2015. In addition, GÖRG acted for the par investor pool to bring an action for payment in the amount of about EUR 940 million before the Frankfurt Regional Court on 15 July 2015 (see press release dated 15 July 2015). GÖRG and DORDA further supported the par investor pool to coordinate with additional creditor groups and to enter into a so-called lock-up agreement (see press release dated 17 December 2015).
Advisors to the par investor pool
GÖRG Partnerschaft von Rechtsanwälten mbB
Dr. Roland Hoffmann-Theinert (Lead Advisor), Partner, Banking/Corporate, Berlin/Frankfurt
Dr. Christian Bärenz, Partner, Restructuring, Cologne
Dr. Yorick Ruland, Partner, Banking, Cologne
Dr. Jens-Dietrich Mitzlaff, Partner, Banking, Frankfurt
Dr. Anne Laspeyres, Associate, Restructuring, Cologne
Dr. Christoph Kunze, LL.M., Associate, Banking/Corporate, Berlin
Cooperation partner in Austria DORDA BRUGGER JORDIS Rechtsanwälte GmbH, Vienna
Dr. Andreas Zahradnik, Partner, Banking
Dr. Bernhard Müller, Partner, Administrative Business Law
Dr. Felix Hörlsberger, Partner, Insolvency Law
Dr. Stephan Steinhofer, Associate, Litigation
Mag. Christoph Hilkesberger, Associate, Banking