Lord Black’s share in Hollinger International, owner of the Telegraph Group, dropped from 30% to 18.2% yesterday, following a refinancing of the cash-strapped holding company.
Due to a pending cash collapse at Hollinger Incorporated, an issue of preference shares was announced, which would convert stock to shares in the Canadian vehicle which holds the stock. The share issue raised C$211 million (£85.8 million).
The move has also resulted in Black’s voting share in the company to be reduced to 68% from 72%.
Hollinger Inc said in a statement yesterday that a delay in filing its 2003 annual report with the US financial regulator, the securities and exchange commission, could force it to default on a $120 million (£65.6 million) bond issue. The company has already missed a 30 June deadline and has a 30 day grace period to produce the report before it defaults.
In the event of default, Black will lose the rest of his stake in Hollinger International.
Yesterday, Hollinger Inc said that Hollinger International was effectively blocking the annual report by failing to hand over vital information but Hollinger International declined to comment. Reports today suggest that sources close to Hollinger International said the company could meet the next interest payment in September and did not expect bondholders to trigger a default over a technicality.
Despite on-going legal disputes between Hollinger International and Hollinger Inc, Black still has the voting power to block the sale of the Telegraph group to the Barclay brothers and he is expected to petition Delaware judge, Leo Strine, for a vote by the end of the week (see Lord Black Gets Court Go-ahead).
Related Links
