Yell is set to find out by Monday whether or not enough of its lenders have approved plans to restructure its £3.8bn ($6.2bn) in debts.
The publisher of the UK Yellow Pages needs 95 per cent of its lenders to approve a package of measures aimed at changing its lending terms, including rescheduling debt repayments in exchange for increased interest payments.
While it is expected that the vote will draw a high level of support, it is uncertain whether the 95 per cent threshold will be met.
If the count falls short of the necessary threshold, the lenders could be given more time to approve, according to one source.
Lenders had until 5pm on Friday to submit their approvals. While initial feedback was positive, the task has been seen as logistically difficult as Yell has about 300 creditors, led by HSBC, and approvals are needed from about 1,000 lending entities.
HSBC, the agent bank, will count the votes over the weekend and deliver the result to Yell by late on Sunday, or Monday morning.
The debt restructuring has been at the top of the agenda for Yell chairman and former Merrill Lynch banker, Bob Wigley since he joined in July. The group aims to reduce its debt burden to £3.3bn with a £500m equity raising, before paying off a further £300m within 18 months either with any extra proceeds of the initial offering or by other means.
Yell is offering lenders an increased rate of interest it pays on its debt from 3 per cent above the interbank lending rate to between 3.5 per cent and 4 per cent above Libor, in exchange for their consent to extend its debt maturities until 2014. Yell faces an additional one-off consent fee of £41m to secure agreement. Last month Yell said it had received indications of support from a “significant” proportion of its largest lenders to the plan.
This is the second debt renegotiation the company has undertaken. Last year, Yell offered banks an increase in interest charges equivalent to 10 per cent of its earnings, in exchange for extra breathing space under credit agreements.
Additional reporting by Salamander Davoudi
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