US-based hedge funds Centrebridge Partners and Black Diamond Capital Management are believed to have taken centre stage in the high drama surrounding the recapitalisation of troubled remote communications and satellite services provider Speedcast.
Centrebridge Partners and renowned activist investor Black Diamond Capital are both lenders to Speedcast.
Black Diamond is known to the Australian market, having lobbied for more money as a lender amid the recapitalisation some years ago of mining services provider Emeco.
Now it is understood that as Speedcast considers a recapitalisation proposal from private equity firm Open Gate Capital, a dispute between hedge funds Centrebridge and Black Diamond is holding up a solution.
Open Gate, a US-based buyout fund, is believed to be offering $US350m ($500m) for the business that once had a market value of more than $1bn. The offer would see all of Speedcast’s debt holders largely paid, some sources say.
Speedcast has 25 lenders and as of December they were owed $669m, but the debt is now trading below its face value — for as little as 10c in the dollar in some cases. The company has been in talks with lenders since it entered Chapter 11 bankruptcy protection in April.
Black Diamond, with more than $US9bn of assets under management, is understood to favour its own proposal to underwrite a recapitalisation and secure a major equity stake in the business over the mooted Open Gate Capital deal.
But the understanding is that Centrebridge wants the sale to Open Gate to proceed.
Black Diamond, founded by former Bear Stearns banker Stephen Deckoff, is understood to hold close to 30 per cent of the debt stack, and other lenders are believed to be hesitant to offer any more funding.
Speedcast’s lenders have provided $US600m from the term loan B market in the US.
When the company last traded, it was worth less than $200m, having been worth as much as $1.4bn in 2018.
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