RESTON, Va.-Despite several frustrating and fruitless negotiations with XO Communications Inc.’s bank lenders, Carl Icahn is still hovering around the company’s restructuring proceedings, this time offering to pay investors 50 cents for every senior secured loan dollar, without any buyback rights.
On July 10 Icahn offered to pay 40 cents for every senior secured loan dollar.
Several obstacles stand in the way of Icahn’s proposal, including an amendment to the credit agreement that states more than 50 percent of the holders must approve any sale. For Icahn’s proposal to work, the holders must rescind the amendment.
Icahn has been in and out of XO’s restructuring plans for several months. He offered to buy 55 percent of XO’s assets for $550 million in March, but pulled that deal off the table when a consensus with senior lenders could not be reached.
Icahn and several partners own 18 percent of XO’s $1 billion bank debt.
Two weeks ago a judge in the U.S. Bankruptcy Court for the Southern District of New York granted XO approval to move forward with its stand-alone restructuring plan should Forstmann Little & Co. and Telefonos de Mexico S.A. de C.V. succeed in backing out of their $800 million restructuring deal.
