Deutsche Bank eyes buyback of ITNL’s IL&FS-guaranteed 7½% notes

By Marisa Wong

Los Angeles, Jan. 5 – Deutsche Bank AG, London Branch, as an existing holder of the RMB 1 billion 7½% notes due 2021 issued by ITNL Offshore Pte. Ltd. and guaranteed by IL&FS Transportation Networks Ltd., is proposing to purchase up to 50% of the original principal amount of the notes, according to a notice.

Deutsche Bank plans to purchase up to RMB 500 million of the notes at purchase prices to be mutually agreed upon with qualifying noteholders participating in the offer.

Any qualifying noteholder interested to offer its notes for purchase by Deutsche Bank should contact Suresh Ganesan (suresh.ganesan@db.com; +852 2203 8658); Ben Tsang (ben.tsang@db.com; +852 2203 8607); and Gautam Prasad (Gautam-b.prasad@db.com; +852 2203 7096) from Jan. 5 to Jan. 10.

ITNL’s liquidation process has encountered significant delays for various reasons. On top of that, additional costs will be expected to be incurred before any recovery can be expected from the issuer. As such, continued engagement from the issuer’s creditors, including the 7½% noteholders, will be critical in ensuring the liquidation process can be expedited, according to a Thursday’s notice.

In light of this, Deutsche Bank wants to consolidate a greater proportion of holdings in the notes in order to facilitate any potential action that noteholders may be required to take or agree to as a creditor class. Under the trust deed for the notes, any special quorum resolution by way of a meeting will require 75% of the outstanding amount of notes in order for the meeting to be quorate (or 25% at an adjourned meeting), as well as a voting threshold of 75% of the principal amount of the bonds present and voting at the meeting.

Deutsche Bank believes there is no identified group of noteholder that own such threshold principal amount required to take any action that would require a special quorum resolution (and this would include virtually all significant actions to be agreed to by noteholders as a creditor class).

IL&FS is a surface transportation infrastructure company based in Mumbai.

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