Prisa Is Said to Seek Alternative to Unanimous Creditor Accord

Promotora de Informaciones SA is considering alternative ways to restructure 2.9 billion euros ($3.8 billion) of debt as it struggles to get support from some lenders, according to two people familiar with the matter.

Prisa, as the company is known, is looking for a way to avoid having to reach unanimous agreement with its 38 creditors to restructure the debt, the people said, asking not to be identified because the deliberations are private. Some lenders are still not on board with the current restructuring plan, making it very unlikely Prisa could get total accord, they said.

British, German and Portuguese creditors are among the ones reluctant to join the refinancing plan, one of the people said. Prisa, Spain’s biggest media company, also told its banks it’s checking with lawyers in the U.S. on a potential Chapter 11 bankruptcy filing there, one of the people said.

“It’s very difficult for a company such as Prisa to reach a unanimous debt restructuring agreement with so many lenders, especially if there are any hedge funds” involved, said Cristobal Cotta, a lawyer at Cuatrecasas, Goncalves Pereira in Madrid, who isn’t involved in the reorganization.

Spain’s bankruptcy law was amended in 2011 to adopt the British practice known as a “scheme of arrangement.” It allows qualifying companies that have a restructuring agreement with creditors accounting for at least three-quarters of their debt to force dissenters to accept it. Spanish steel producer Celsa Group has recently used this method.

Still Trying

Last month, Madrid-based Prisa said 72.9 percent of its creditor banks approved a plan to restructure its debt and it was confident it would reach unanimous agreement in weeks. Prisa is seeking more liquidity and to extend syndicated and bilateral debt maturities for more flexibility, it said.

Prisa is still trying to reach a deal to restructure its debt, which is a lengthy process given the number of lenders involved, according to a spokeswoman at Prisa, who asked not to be named citing company policy. She declined to comment on any details of the debt negotiations.

“This Spanish version of the scheme of arrangement could be a potential solution for many other companies facing a similar situation in order to avoid the bankruptcy,” Cotta said.

Prisa shares dropped 11 percent to 19.5 euro cents yesterday in Madrid. The stock has lost 17 percent this year, valuing the publisher of El Pais newspaper at 201 million euros.

The Wall Street Journal reported yesterday Prisa has considered filing for Chapter 11 bankruptcy protection in the U.S.

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