Telegraph.co.uk – One of the biggest shareholders in Sea Containers, the troubled owner of the GNER rail franchise, is resisting plans for a $700m (£379m) debt-for-equity restructuring designed to save the group from collapse.
Appaloosa Management, the New Jersey-based hedge fund run by David Tepper, one of the richest hedge fund managers in the world, has built a stake of 11.3 per cent in Sea Containers, which revealed last week that it could default on a $115m bond payment due to be made in October, and warned of a similar fate for other bonds due over the next five years.
It is understood that the company has told its bondholders to form a committee in preparation for a debt-for-equity swap. But Tepper has indicated that he would resist any moves to dilute his holding.
Tepper bought his stake at between $7 and $8 a share. He is understood to believe the equity to be worth closer to $17 a share.
Sources familiar with Sea Containers have suggested that Tepper has misinterpreted the scale of its problems and that the shares are worth no more than $2 each.
