A Citigroup Inc. (C) unit acting as trustee to about 660 million pounds ($1 billion) of securitized debt linked to General Healthcare Group Ltd. asked a U.K. court to rule on which creditors could vote on a restructuring proposal.
Loans underlying two special purpose vehicles are due to be repaid in October, Citicorp Trustee Company Ltd. said in documents from a London court hearing today. “If a restructuring is not arranged, it appears that there is likely to be a security shortfall.”
Junior lenders to General Healthcare, a unit of South Africa-based Netcare Ltd. (NTC) that runs 65 private hospitals in the U.K., are seeking to extend the date of repayment for about 1.5 billion pounds of debt maturing in October.
Barclays Plc (BARC) is among a group of senior lenders to General Healthcare that is proposing a restructuring agreement involving asset sales, the U.K. trade magazine Property Week reported. The bank, which holds 288 million pounds of senior notes, appeared at the hearing seeking clarification of its voting rights, according to court documents.
Citicorp can’t proceed with a restructuring without approval from Barclays and another noteholder, Rabobank International, the trustee said in its legal documents. Jon Laycock, a spokesman for Barclays, and Jeffrey French, a spokesman for Citigroup, declined to immediately comment.
General Healthcare’s debts are linked to its property companies and don’t threaten the operation of hospitals by its subsidiary BMI Healthcare Ltd., Craig Lovelace, BMI’s chief financial officer, said in an e-mailed statement.
The court must decide “who of the creditors is entitled to vote” on the restructuring proposal, Judge Peter Smith said at the hearing.
The case is Citicorp Trustee Company Ltd. v. Barclays Bank Plc & Ors, case no. 13-3323, High Court of Justice, Chancery Division.
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