GoldenTree-Led Group Said to Near Debt Deal With Eco-Bat Owner
(Bloomberg) -- A group of investors led by GoldenTree Asset Management LP are close to ending a year-long legal spat with Eco-Bat Technologies’s owner Howard Meyers over restructuring a loan.
Under the proposed agreement, holders of a 1.6 billion euro ($1.8 billion) facility that paid interest with more debt will swap their exposure for equity, leaving them in full control of the company, according to people familiar with the matter. Meyers will transfer the U.S. smelting operation RSR into Eco-Bat and will be entitled to some of the proceeds when the new owners sell the lead producer, the people said, asking not to be identified because the talks are private.
A deal would draw a line under a court battle that started in March 2017. As restructuring talks broke down, the GoldenTree group said Meyers had caused EB Holdings to overstate its financial health to get the loan and took some proceeds for himself. EB Holdings II, Eco-Bat’s parent company controlled by Meyers and the issuer of the payment-in-kind facility, countersued saying that the lenders dragged out negotiations because they wanted the debt to go into default.
Meyers sold 600 million euros of PIK loans through holding company EB Holdings II in 2007 to refinance existing debt and pay himself a 268 million-euro dividend, according to court documents. The size of the debt ballooned as ten years of interest accrued to the principal. Many of the original creditors subsequently sold on their exposure to hedge funds.
An external spokesman for GoldenTree declined to comment. A representative for Meyers based in Dallas confirmed talks are underway but declined to give further details. Officials at Eco-Bat didn’t return calls and emails seeking comment.
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