Boston, MA 08/18/2014 (wallstreetpr) –Wireless communication services provider NII Holdings Inc (NASDAQ:NIHD) has taken cover under the grace period of thirty days for payment of interest to its senior notes holders. The company’s subsidiaries, which had issued senior notes, had missed to paying the interest of approximately $118.8 million on the due date of August 15.
Exploring Restructuring Of Bonds
NII Holdings Inc (NASDAQ:NIHD)’s subsidiaries, NII International Telecom, S.C.A and NII Capital Corp. were responsible for making the interest payments on August 15, which they failed. However, the company had expressed its confidence of making the interest payment during the grace period. The company has been engaged in discussions with the creditors and their representatives to explore the possibilities of restructuring the senior notes. The proposal included exchange of notes for equity shares either in part or in full. Alternatively, the holders would be issued fresh debt securities of the reorganized firm.
However, the company indicated that there has been no agreement with the creditors on any possible restructuring of its obligations. It had also preferred not to make any promise that the company and the creditors would strike a deal based on the current negotiations.
Senior Notes Maturing 2016
NII Holdings Inc (NASDAQ:NIHD)’s senior notes of $800 million carrying 10% coupon rate are due for August 2016. The company would be hard pressed to at least restructure these notes during its discussions with bondholders.
In all, the company has a debt of $5.8 billion and the recovery rate would likely be as small as 20%, Bloomberg reported quoting Moody’s Investors Service. Aurelius Capital Management, the creditor of NII Holdings Inc (NASDAQ:NIHD), had also claimed that the company was already a defaulter.
Stock Price
Share price of NII Holdings Inc (NASDAQ:NIHD) had hit a 52-week high of $7.50 and a low of $0.12. After the new of interest payment being missed came out, the stock witnessed downside pressure on Friday.
Bankruptcy Protection
There are already reports indicating that the company had warned that it would like seek protection under Bankruptcy under Chapter 11 in the very near future. Now that the company had missed a payment of interest and in case it failed to strike a deal with the creditors, seeking protection under bankruptcy cannot be ruled out.
