Italian directories group Seat Pagine Gialle is attempting to step up its efforts to avert corporate insolvency.
Seat's board is seeking two more weeks to finalise the company's financial restructuring and win full support from creditor banks in order to save the group from insolvency proceedings.
Seat has technically defaulted after announcing earlier this week (Tuesday November 29th) that it would not pay a coupon on a 1.3 billion euro (£1 billion) junior bond called Lighthouse by Wednesday.
After failing to win enough support from creditors for a proposal to restructure its 2.7 billion euro net debt, Seat missed the payment, resulting in its shares tumbling by more than 16 per cent.
The company said that it will continue to withhold the payment until a broad agreement is reached. Earlier this week, Seat reached agreement from the required 75 per cent of bondholders.
However, only 65 per cent of Seat's senior lenders have approved the restructuring, whixh would result in the conversion of a 1.2 billion euro portion of the Lighthouse bond into shares.
If the bonds are converted at market value, Seat's creditors would control three-quarters (75 per cent) of the company. If converted at nominal value, the creditors would claim 95 per cent of the firm.
Seat's board is now requesting that Lighthouse bondholders postpone the missed 52 million euro coupon until the middle of December. If they agree to do so, it is understood that the company could avoid corporate insolvency under Italian laws.
Seat's senior lenders are comprised of a group of around 70 banks based in Italy and abroad, including Britain's Royal Bank of Scotland, UniCredit, BNP Paribas and Intesa Sanpaolo.
The directories company was acquired by private equity firms in 2003 as part of a 5.7 billion euro leveraged buyout. Almost half (49.5 per cent) of Seat is now held by CVC, Permira and Investitori.