A debt-for-equity swap has been proposed by a group of secured debt holders
A group of Towergate bond holders, who hold 52% of the senior secured debt in the broking group, has expressed an interest in buying the troubled broker in a debt-for-equity swap deal.
Moelis & Company, acting for the bondholder group, said that the deal would also include an additional payment of £1 per bondholder to help fund “financial restructuring”.
The move comes after Towergate invited unsecured bondholders to bid for the company in December last year. The broker has a legal obligation to invite bondholders to submit a takeover bid when negotiations with other parties reach a certain stage, Insurance Times understands.
Towergate appointed Evercore and Rothschild to advise on a potential sale of the group in November.
It also revealed that it would need to renegotiate its banking covenants and make non-core disposals if it is to have enough cash to continue as a going concern in Q1 2015.