A group of hedge funds based in London have been restructuring an agreement with Schefenacker, a German vehicle parts company with whom they have investments.
Many of Schefenacker’s creditors are in London and the group of hedge funds believe it would be easier to organise a speedy restructuring if the company would move its headquarters to the UK. Creditors there can force stakeholders to accept the new plan through a scheme of agreement, which is not possible in Germany.
Schefenacker refinanced $400m after its business came under pressure last year and the bonds and loans were acquired by London and New York hedge funds. Last month, the company issued a dire earnings statement that left rating agencies downgrading its debt to a level that implies the company is close to bankruptcy.
The bonds went from about 80% of face value to 30%, and its loans now trade at about 85% of face value, compared with 103% three weeks ago. Schefenacker said on Monday that there was no formal agreement on such a move yet, and it stressed that any move would not affect its German operations.
Schefenacker has 27 production plants and six engineering centres gobally, employing more than 7,900 people the company supplies to car makers such as DaimlerChrysler AG, Ford Motor Co. and General Motors Corp.
19 Oct 2006
Hedge Funds Involved in Scania/MAN Takeover
The Frankfurter Allgemeine Sonntagszeitung reported that several large hedge funds are buying shares in MAN AG and Scania. Not saying who these hedge funds are, the Frankfurter reports they may now have over 15% of Scania shares. The newspaper also said that hedge funds own a significantly smaller amount of MAN’s shares, without giving a specific percentage.
These numbers may play a role in the decisions made with the 18.7 pct stake in Scania owned by that Volkswagen AG, which is comparable to the hedge fund shares. VW said it would only offer that holding to MAN if the latter’s bid draws commitments from holders of at least 71.3% of Scania’s shares.
Truck maker Scania AB, however is fighting the $12.9 billion bid from rival MAN AG, saying they would pay extra dividend on their shares this year. This special dividend, worth a total of $949 million, makes it more attractive for shareholders to hold on to Scania shares and may force MAN to increase its bid for a second time, analysts say.
Volkswagen, the largest shareholder of both MAN and Scania, wants the two companies to treat the deal as a merger rather than a takeover, asking MAN and Scania to negotiate following MAN’s $10.3bn hostile bid for Scania.
These numbers may play a role in the decisions made with the 18.7 pct stake in Scania owned by that Volkswagen AG, which is comparable to the hedge fund shares. VW said it would only offer that holding to MAN if the latter’s bid draws commitments from holders of at least 71.3% of Scania’s shares.
Truck maker Scania AB, however is fighting the $12.9 billion bid from rival MAN AG, saying they would pay extra dividend on their shares this year. This special dividend, worth a total of $949 million, makes it more attractive for shareholders to hold on to Scania shares and may force MAN to increase its bid for a second time, analysts say.
Volkswagen, the largest shareholder of both MAN and Scania, wants the two companies to treat the deal as a merger rather than a takeover, asking MAN and Scania to negotiate following MAN’s $10.3bn hostile bid for Scania.
Attorney General Creates Hedge Fund Task Force
Connecticut’s attorney general, Richard Blumenthal, is taking a special interest in the “regulatory void” surrounding hedge funds. After the spectacular faliure of the Amaranth Advisors $6 billion hedge fund last month, Blumenthal has used his position to start a task force on hedge funds, although at the moment it’s only an informal group.
Connecticut is home to an estimated $250 billion of the $1.2 trillion under management in hedge funds, according to Chicago’s Hedge Fund Research. Blumenthal says us he’s still in the early stages of studying the issue and would prefer leave it to the federal government rather than taking action himself. “I don’t want to disadvantage Connecticut hedge funds” by imposing excessively burdensome rules, he claims, but “The facts about mammoth losses by Amaranth offer additional powerful and compelling evidence about the need to reform disclosure and oversight requirements.”
It is unclear how hedge fund abuse would play as a political issue as Blumenthal considers running for higher office, but the Wall Street Journal reported last week that 23 of 41 economists surveyed said they think hedge funds need more regulatory oversight. More than once in the past Blumenthal has made statements that suggest he looks at business failure and investing losses as a criminal act.
Connecticut is home to an estimated $250 billion of the $1.2 trillion under management in hedge funds, according to Chicago’s Hedge Fund Research. Blumenthal says us he’s still in the early stages of studying the issue and would prefer leave it to the federal government rather than taking action himself. “I don’t want to disadvantage Connecticut hedge funds” by imposing excessively burdensome rules, he claims, but “The facts about mammoth losses by Amaranth offer additional powerful and compelling evidence about the need to reform disclosure and oversight requirements.”
It is unclear how hedge fund abuse would play as a political issue as Blumenthal considers running for higher office, but the Wall Street Journal reported last week that 23 of 41 economists surveyed said they think hedge funds need more regulatory oversight. More than once in the past Blumenthal has made statements that suggest he looks at business failure and investing losses as a criminal act.
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