Air Berlin’s bonds — some of which were also sold by Anoa Capital — are bid at just 9 cents on the euro © AFP

When Air Berlin fell into insolvency last month, among its largest creditors were two obscure investment vehicles that sold $1.2bn in structured bonds to fund some of the largest airlines in the world, including Etihad and Alitalia.

Now, these bondholders may find their fates in the hands of Anoa Capital, an obscure Luxembourg brokerage with ties to Lars Windhorst, a flamboyant German financier.

Employing fewer than 20 people after a difficult 2016 in which Anoa shut its office in London’s hedge fund stronghold of Mayfair, the firm helped devise the structure of $1.2bn of bonds sold in 2015 and 2016 by EA Partners I and II.

These special-purpose vehicles packaged up loans to Etihad, the Abu-Dhabi based carrier and Air Berlin’s biggest shareholder, and the airlines in its partners’ network such as Alitalia.

Airline bankruptcies are hardly an uncommon occurrence. Alitalia itself was forced into administration in May, and almost every big US carrier has spent some time in bankruptcy reorganisation, where creditors find themselves taking pennies on the dollar of their original investment.

But what makes Air Berlin’s demise unusual is the central role played by such a small, unknown brokerage firm such as Anoa, whose UK branch is now registered to an office above a jeweller’s shop in the commuter town of Sevenoaks in Kent.

Anoa’s original EA Partners bond deal, a $700m issuance in September 2015, was completed with the help of Goldman Sachs and Abu Dhabi-based ADS Securities.

Those bonds collapsed in value after the German airline’s insolvency filing last month, with the debt now trading at about 85 cents on the dollar and yielding more than 12 per cent.

The plunge in value was tied to the way they were structured, working like a collateralised loan obligation, which can only pay coupons to bondholders if the underlying borrowers — which in this case include Air Berlin — keep making payments on their loans.

On Monday, EA Partners I announced that it expected to draw on a liquidity pool ahead of its next coupon payment this month. This liquidity pool builds up over the life of the bond and can be drawn on to make up any shortfalls, but Fitch Ratings has said doing so will soon trigger a “remarketing event” — a provision in the bonds by which underlying loans that default are auctioned off to raise cash.

Investors and analysts are concerned that the mechanism by which an auction takes place is not well defined, leaving a lot of latitude to the “remarketing agent” — a role that falls to Anoa Capital and puts them in charge of any auction.

“Although the bond document does say to some extent how the remarketing process should work, there’s nothing in explicit detail,” says Chetna Mistry, a legal analyst at Reorg Research, a distressed-debt analysis firm. “And if the debt obligation that is being sold at auction is in default, you have to ask how successful they would be in auctioning it at par value.”

Air Berlin’s bonds — some of which were also sold by Anoa Capital — are bid at just 9 cents on the euro, suggesting poor recoveries for the more than $220m of loans to the German airline backing the EA Partner bonds.

Credit analysts at JPMorgan say that a remarketing event could be triggered as soon as this month, but they believe that Abu Dhabi is under pressure to bail out the bondholders because “a substantial quantum of these bonds are housed among domestic investors”.

“We expect Etihad or an Abu Dhabi government-owned affiliate to acquire the defaulted obligations so as to have a ‘successful’ remarketing outcome,” Zafar Nazim, a JPMorgan credit analyst, noted.

Many bond investors say they would not bank on state support, however, because Etihad does not formally guarantee the bonds and has stepped back from supporting its partner airlines after booking an $808m impairment.

And several fund managers say that they also have reservations about the bonds because of Anoa’s connections to Mr Windhorst, whose unconventional financing techniques — which used a complex web of funding vehicles — have led to a legal battles with investors.

Sapinda, an investment vehicle founded by Mr Windhorst, purchased a stake in Anoa Capital in 2013 and the brokerage has sold numerous bonds for companies and funding vehicles in which he has invested.

Dirk van Daele, Anoa Capital’s chairman and majority shareholder, says that, while his firm occupies the formal remarketing agent role, “there’s no doubt that Goldman and ADS are going to be involved” if a resolution is needed.

“We’ll see where the bond goes,” he adds. “But I don’t think in the end investors are going to be displeased.”

Lars Windhorst, a German financier whose unconventional financing techniques have led to legal battles with investors © Charlie Bibby/FT

Anoa Capital and Lars Windhorst: a history

In 2012, Anoa Capital entered into a commercial agreement with Sapinda Holding, allowing the brokerage to tap Mr Windhorst’s extensive contacts to drum up business.

The relationship was mutual: the following year Sapinda Holding bought a 9.9 per cent stake in Anoa, which — according to Sapinda’s corporate filings — it did to access placement services for equity, convertibles and fixed income securities. The FT reported last month that Sapinda’s stake has since slipped to 8.2 per cent.

If Mr Windhorst held a 10 per cent or higher stake it would have needed regulatory approval, which would have been difficult to obtain, people familiar with the matter say, because of his troubled past. A one-time teenage prodigy and poster boy for entrepreneurship in his native Germany, Mr Windhorst presided over several company insolvencies, a personal bankruptcy and received a suspended jail sentence in 2009.

Mr Van Daele, Anoa Capital’s chairman, told the FT that Sapinda was one of a number of commercial partners his brokerage uses to source deals, but he declined to name any of the other groups, citing their wish to remain private. He adds that while the partnership with Sapinda still stands, it is “not very active now”.

“As you can imagine, they have a few other issues,” Mr van Daele says.

Six separate civil lawsuits involving nearly €220m have been filed in London’s High Court against either Mr Windhorst, Sapinda Holding or Sapinda Invest since March 2016. A recent corporate filing showed that Mr Windhorst was no longer managing director of Sapinda Holding.

A spokesman for Mr Windhorst declined to comment on his relationship with Anoa.

The historic links between Anoa and Sapinda go beyond the partnership and minority stake, however. Anoa’s former London office was in the same Savile Row building as Sapinda, one floor below Mr Windhorst’s expansive offices.

Peter Wiesing, a non-executive director of Anoa Capital, was the chief financial officer of Sapinda Holding and is from the same small German town as Mr Windhorst. Dr Wiesing also holds his own minority equity stake in Anoa through a vehicle called Herm Holding.

Mr van Daele himself is the head of a charity named after Mr Windhorst’s investment vehicle — the Sapinda Rainbow Foundation. He is also a director at Track Group and Fyber, both publicly listed companies in which Sapinda was formerly a major shareholder.

Fyber was until recently known as RNTS and Anoa Capital placed €100m of convertible bonds for the company in July 2015, which repaid shareholder loans to Sapinda and Mr Windhorst. The brokerage sold bonds for multiple other companies that Mr Windhorst owned stakes in, including Grand City Properties, Sequa Petroleum and even Sapinda itself.

Mr van Daele said that 2016 “wasn’t a great year” for Anoa, but attributed the brokerage’s problems to an ill-fated attempt to build out a secondary market trading platform, rather than being tied to the troubles at Sapinda. He added that the Kent office is a temporary solution to maintain the brokerage’s UK licenses.

“We’re coming back into Mayfair,” Mr van Daele says.

Additional reporting by Arash Massoudi

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