Sterling Biotech Gets More Time to Negotiate With BondholdersKit Chellel
A London judge gave Sterling Biotech Ltd., a Mumbai-based producer of gelatin, three weeks to finish negotiations with bondholders owed about $194 million.
Bank of New York Mellon Corp., trustee for the bonds, sought a ruling ordering repayment at a hearing in London today. Sterling is “plainly insolvent” and doesn’t have a restructuring plan, BNY lawyer William Edwards told the court.
The bank asked an Indian court to wind up Sterling after it defaulted on the bonds in May of last year, Edwards said. Sterling shares have fallen 32 percent since the default.
Sterling’s lawyer Andrew Twigger said the company was in talks with bondholders, nearly half of whom didn’t want BNY to pursue a London court order. A ruling is “bound to affect the viability of the company as a going concern and the value of the bonds.”
Judge David Mackie adjourned his decision for 21 days to allow “the dust, in terms of the bondholder’s wishes, to settle.”
Malcolm Borthwick, a BNY spokesman in London, didn’t immediately respond to a message sent through the company’s website seeking comment.
Sterling’s U.K. lawyer Prakash Patel declined to comment outside court.
The company also has 3 billion rupees ($55 million) of 12 percent bonds due in August 2015, according to data compiled by Bloomberg.