- 50 million-euro coupon due on June 30 was paid on Aug. 11
- Bond terms give issuer flexibility on repayment timing
Lars Windhorst’s Sapinda Invest SARL paid interest on its 1-billion-euro bond ($1.1 billion) six weeks after the due date.
The 50 million-euro coupon, which was due on June 30, was paid to investors on August 11, according to Olivier Schoppach, a spokesman for BNP Paribas Securities Services, the bond’s paying agent. Dirk van Daele, head of the investment committee of Sapinda Invest, declined to comment on the reason for the late payment.
Sapinda Invest’s bond, which pays a 5 percent annual coupon and offers a 75 percent participation in profit, doesn’t include provisions for default and doesn’t have a grace period if an interest payment is missed, according to the offering memorandum. The firm is obliged to pay back the principal at market prices when a coupon is missed only if creditors ask for repayment, which didn’t happen, Van Daele said in an interview in London.
“Sapinda’s bond is not your typical high-yield instrument and our large backers know it’s an alternative investment instrument by its nature,” said Van Daele. “The bond gives them the possibility to participate in Lars’s investments. The bond allows us to remain flexible in our decisions.”
The proceeds of the five-year securities that were sold mainly to wealthy investors starting in 2014 provided investment capital for the 39-year-old German businessman, who became famous in the nineties as a teenage entrepreneur. Sapinda Invest would be in breach of bond terms if Windhorst ceased to be chairman of the board or stopped playing an “active and leading role” in the firm, according to the bond offering memorandum.
The approach attracted early buyers including Italian insurer Assicurazioni Generali SpA, according to two people familiar with the matter, who asked not to be identified because it’s private. Generali held 35 million euros of the notes, according to the firm’s latest filing in April. Documents used to market the bonds by a brokerage firm in 2014 said backers included billionaires Len Blavatnik, owner of Warner Music Group, and Israeli ship-owner Eyal Ofer.
Representatives for Generali and Blavatnik declined to comment on any investments. A representative for Ofer was unavailable for comment on whether Ofer holds the notes.
Windhorst, a high-school dropout, stood trial on 35 charges of fraud, embezzlement and breach of trust in Dec. 2009, the Telegraph newspaper reported. Prosecutors agreed to drop the fraud charges if he paid a 1 million-euro fine, repaid 2.5 million euros to his alleged victim and admitted a breach of trust offence, for which he was given a one-year suspended prison sentence, the newspaper reported.