UPDATE 2-RadioShack to get liquidity boost via replaced facility

Fri Oct 3, 2014 6:29pm EDT

(Adds details from RadioShack press release)

By Sruthi Ramakrishnan

Oct 3 (Reuters) - RadioShack Corp said a group of investors led by Standard General LP have replaced GE Capital as lead lender of its asset-based credit facility, in a move that will allow the struggling electronics retailer to tap more funds ahead of the crucial holiday shopping season.

Standard General, Litespeed Management LLC and other investors are also providing $120 million to be used to cash collateralize letters of credit for the company, RadioShack said in a statement.

The company said it would seek to convert the $120 million into equity "in the coming months", following which RadioShack's board would be reconstituted with the CEO, two independent directors selected by RadioShack, and four people nominated by Standard General.

Reuters reported earlier in the day that a group of investors replaced the $585 million debt facility provided by GE.

The equity conversion depends on changes to a supplier contract, at least $100 million in cash and borrowing capacity by Jan. 15, a financial plan for 2016 meeting certain requirements, and the completion of a rights offering of as much as 700 million shares.

RadioShack said it would not seek shareholder approval for the rights offering, citing an exception in the New York Stock Exchange's policy.

While the amended credit facility provides RadioShack time to pursue a longer-term restructuring plan, it would still need to convince lenders to let it close stores and cut costs, Chief Executive Joe Magnacca said in the statement.

RadioShack shares were halted early in the day following reports of a refinancing.

RadioShack said last month that it may need to file for bankruptcy protection if its cash situation worsened.

The company said it was also exploring other options, including a sale or an investment, and liquidation as the last resort.

Standard General said last week it was in talks to improve RadioShack's cash position.

The hedge fund also said it had raised its stake in RadioShack to 9.8 percent from 7.08 percent to become the company's largest shareholder.

RadioShack has hired Peter J. Solomon Co as its financial adviser and Jones Day as its legal counsel. (Additional reporting by Ramkumar Iyer and Supriya Kurane; Editing by Sunil Nair and Ted Kerr)

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UPDATE 1-Skye Bank picked as buyer for Nigerian lender Mainstreet

Sat Oct 4, 2014 5:14am EDT

(Adds background)

LAGOS Oct 4 (Reuters) - Nigeria's state-owned rescue bank AMCON has picked mid-tier lender Skye Bank as the winning bidder for the nationalised Mainstreet Bank, AMCON said on Saturday.

Asset Management Company of Nigeria (AMCON) had sought bidders for the sale of its 100 percent stake in Mainstreet Bank, one of three banks nationalised following a $4 billion central bank bailout that saved several Nigerian lenders from near bankruptcy in 2009.

An AMCON statement did not give details of the agreed price for the sale.

It said Fidelity Bank had been chosen as the reserve bidder in the event that first choice Skye Bank and Cedar One Investment Partners Limited could not complete the transaction as agreed.

Last month, AMCON selected HBCL Investment Services Limited (HISL), a private commercial bank, as the successful bidder to buy the nationalised Enterprise Bank.

AMCON said its decision followed a "rigorous and competitive bidding process" in which 25 foreign and local entities had initially shown interest. Barclays Africa and local investment firm Afrinvest acted as advisers for the sale.

Mainstreet, with over 200 branches, is the second of the three nationalised banks to be put up for sale by AMCON, which was set up to help resolve the 2009 banking crisis, triggered by reckless lending and a stock market collapse in 2008.

Afribank, Spring Bank and Bank PHB, were nationalised in 2011. AMCON then recapitalised them and changed their names to Mainstreet Bank, Enterprise Bank and Keystone Bank, respectively. (Reporting by Chijioke Ohuocha; Editing by Susan Thomas and Mark Potter)

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Skye Bank picked as buyer for Nigeria's nationalised lender Mainstreet

LAGOS Sat Oct 4, 2014 4:45am EDT

LAGOS Oct 4 (Reuters) - Nigeria's state-owned rescue bank AMCON has selected mid-tier lender Skye Bank, as the successful bidder to buy nationalised lender Mainstreet Bank, AMCON said.

Asset Management Company of Nigeria (AMCON) had sought bidders for the sale of its 100 percent stake in Mainstreet Bank, one of three banks nationalised following a $4 billion central bank bailout that saved several Nigerian lenders from near bankruptcy in 2009.

An AMCON statement released on Saturday did not give details of the agreed price of the sale. (Reporting by Chijioke Ohuocha; editing by Susan Thomas)

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Judge to rule Friday on pensions at Atlantic City Trump casino

By Tom Hals

Thu Oct 2, 2014 5:16pm EDT

Oct 2 (Reuters) - A U.S. Bankruptcy judge said he will rule Friday on a request to end pension contributions by the owner of the Trump Taj Mahal casino, which said it will close its Atlantic City hotel if it cannot shed some obligations to unions.

Ridding the pension obligation is a key to a deal to prevent the casino from being the fifth to close this year in the beleaguered New Jersey seaside resort, which has suffered as neighboring states have embraced gambling. The closure of four casinos so far this year has cost Atlantic City thousands of jobs.

Trump Entertainment has proposed a reorganization plan that is contingent on obtaining tax concessions from New Jersey and Atlantic City as well as ending pension and health benefits for 1,200 unionized workers at the Taj Mahal.

If those concessions are made, billionaire investor Carl Icahn has said he will invest $100 million and convert half of the $292 million he is owed into stock in the company, giving him control after its bankruptcy.

"If we are unsuccessful, this business will close," William Hardie, a managing director at investment bank Houlihan Lokey, which advised Trump Entertainment, testified in court. "In my opinion we have to get rid of this burden today."

U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware, said he will rule at noon on Friday.

Gross began Thursday's hearing by saying he thought Trump Entertainment Resorts Inc was moving too quickly to end pension contributions and pushed the two sides to negotiate.

Gross also questioned if the union, Unite Here Local 54, was willing to risk the loss of jobs at the Taj Mahal in order to avoid setting a precedent on the treatment of benefits.

"Are they being sacrificed for the benefit of other union employees at other casinos?" Gross asked at the start of the four-hour hearing.

A union pension plan attorney said Trump Entertainment is using the bankruptcy to spruce up the casino for Icahn by modifying the collective bargaining agreement and preserving up to $1 billion in tax benefits.

Trump Entertainment's attorney rejected that claim.

"It's easy to point a finger at Icahn and say he's the big bad wolf," said Kristopher Hansen at the law firm Stroock & Stroock & Lavan. "This is not about taking care of Mr Icahn."

The case is In Re: Trump Entertainment Resorts Inc, U.S. Bankruptcy Court, District of Delaware, No. 14-12103 (Reporting by Tom Hals in Wilmington, Delaware; Editing by Leslie Adler)

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UPDATE 1-Settlements spared bankrupt Detroit costly litigation - manager

Thu Oct 2, 2014 7:02pm EDT

(Adds Orr questioning by FGIC attorney)

By Karen Pierog

DETROIT Oct 2 (Reuters) - Without a series of settlements, Detroit would face years of costly litigation from creditors and others, with no guarantee that the city would win, Kevyn Orr, Detroit's emergency manager, said on Thursday.

Orr, on the stand for a second day at a federal court hearing, also defended Detroit's 1,111-page bankruptcy plan, saying it was crafted in good faith and provides a framework and resources for the city's renaissance.

An attorney for the city's last major hold-out creditor peppered Orr with questions concerning the fairness of the plan's disparate treatment of the city's unsecured creditors.

Orr, appointed by Michigan's governor in March 2013 to salvage Detroit's finances, is considered the key witness in the city's historic bankruptcy trial. Under Orr's watch, Detroit filed the largest municipal bankruptcy in U.S. history in July 2013.

The emergency manager, during questioning by Ed Soto, attorney for Financial Guaranty Insurance Co, verified several times that certain unsecured creditors fare worse than the city's pensioners under the plan. The bond insurance company, which local media has reported is in settlement talks with Detroit, faces a recovery of 10 cents to 13 cents on the dollar for its $1.1 billion exposure from insuring Detroit pension debt.

Soto played video snippets of Orr media interviews and a July deposition to underscore that the "human dimension" of the pensioners was a factor in determining creditor recoveries even though Orr had initially intended to treat all unsecured creditors equally.

Judge Steven Rhodes is holding the weeks-long hearing to determine if Detroit's plan to exit bankruptcy, which contains the settlements with major creditors, is fair and feasible.

Orr, whose powers were reduced by Detroit's elected officials last week, testified earlier on Thursday that major creditors and others either filed or were poised to file lawsuits against Detroit after it declared bankruptcy.

"I don't think anyone was going to be pulling punches in any litigation against the city," he said.

The cost of defending lawsuits filed just by bond insurer Syncora Guarantee Inc, the city's fiercest opponent before it settled last month, was estimated at as much as $10 million, Orr testified.

"I think they filed litigation to just about everything we tried to do in bankruptcy court," he said, adding that included a dispute over city casino tax revenue and a $120 million loan from Barclays.

Orr said Detroit also faced potential litigation from a court-appointed retiree committee over healthcare claims and from many parties, including Michigan's attorney general, over any attempt to sell works at the Detroit Institute of Arts (DIA).

The city averted those threats with settlements reached through court-ordered mediation.

The most notable is the so-called Grand Bargain, struck to prevent an art sale for paying off creditors. The bargain creates a pot of money from foundations, the DIA and the state of Michigan for public pension payments.

In questioning by Soto, Orr said Detroit never undertook a comprehensive audit of the art work to determine its ownership. Orr had testified that some of the pieces had been purchased with tax money. Orr also said he did not know if the city had taken steps to verify a Michigan attorney general opinion that the art could not be sold to satisfy the city's debts.

FGIC has been pushing the city to sell or monetize the art to boost recoveries for all creditors.

In testimony carefully steered by Detroit's attorney Greg Shumaker at Jones Day, Orr said the settlements were meant to be affordable and sustainable for the city, fair under certain circumstances, and result in better city services.

"We are not trying to get to gold plate or platinum services. We're trying to get to national averages," Orr said.

When the hearing began on Sept. 2, each side had 85 hours to make its case.

Judge Rhodes on Thursday sliced 14 hours off the hearing schedule, mostly because of Syncora's settlement. The objectors now have 54 hours and 3 minutes left for their case and the city 31 hours and 45 minutes. (Additional reporting by Lisa Lambert in Washington; editing by Matthew Lewis and David Gregorio)

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RadioShack reaches refinancing deal with Standard General - Bloomberg

Fri Oct 3, 2014 12:56am EDT

Oct 3 (Reuters) - Cash-strapped electronics retailer RadioShack Corp has reached an agreement with a consortium led by its largest shareholder Standard General LP to refinance about $590 million of loans to re-stock ahead of the holiday season, Bloomberg reported, citing a person familiar with the matter.

The New York-based hedge fund will lead a group of lenders to refinance debt outstanding under a $535 million asset-backed revolving credit line from GE Capital, the lending unit of General Electric Co, Bloomberg said. (bloom.bg/1uFZbO0)

RadioShack said last month it may need to file for bankruptcy protection if its cash situation worsens. The company said it was also exploring other options, including a sale or an investment, and liquidation as the last resort.

Last week, Standard General said it was in talks to improve RadioShack's cash position ahead of the crucial holiday season. The hedge fund also raised its stake in RadioShack to 9.8 percent from 7.08 percent, becoming the company's largest shareholder.

Standard General and certain new investors would invest in the credit facility, and the investors have committed to provide draft financing to fund the transaction, the hedge fund said in a regulatory filing.

RadioShack and Standard General did not immediately respond to a request for comment outside regular U.S. business hours. (Reporting by Supriya Kurane in Bangalore; Editing by Sunil Nair)

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Brookfield bids for Atlantic City's Revel Casino - WSJ

Sept 30 Tue Sep 30, 2014 1:24pm EDT

Sept 30 (Reuters) - An affiliate of Brookfield Asset Management has topped Florida real estate developer Glenn Straub's $90 million bid for the bankrupt Revel Casino Hotel in Atlantic City, the Wall Street Journal reported, citing sources.

The auction started on Wednesday with Straub's all-cash bid, but was adjourned until Tuesday for the Jewish Rosh Hashanah holiday.

Brookfield, which owns the Hard Rock Hotel and Casino Las Vegas, could not immediately be reached for comment.

If Straub loses the auction, he will collect a $3 million breakup fee for serving as the lead bidder, the newspaper said. (on.wsj.com/1vtHPml)

Straub said on Monday that he would challenge the results if he lost the auction because the process lacked transparency.

Other bidders could include real estate developer Richard Meruelo, who expressed an interest in buying Revel Casino in a bankruptcy court last week, the WSJ said.

Two-year-old Revel Casino, which cost $2.4 billion to build and closed on Sept. 2, is among the four Atlantic City casinos that closed this year as neighboring states have embraced gambling to increase government revenue. (Reporting by Ankit Ajmera in Bangalore; Editing by Kirti Pandey)

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UPDATE 1-Brookfield bids for Atlantic City's Revel Casino - WSJ

Tue Sep 30, 2014 1:57pm EDT

Sept 30 (Reuters) - An affiliate of Brookfield Asset Management has topped Florida real estate developer Glenn Straub's $90 million bid for the bankrupt Revel Casino Hotel in Atlantic City, the Wall Street Journal reported, citing sources.

The auction started on Wednesday with Straub's all-cash bid, but was adjourned until Tuesday for the Jewish Rosh Hashanah holiday.

Brookfield, which owns the Hard Rock Hotel and Casino Las Vegas, declined to comment on the report.

If Straub loses the auction, he will collect a $3 million breakup fee for serving as the lead bidder, the newspaper said. (on.wsj.com/1vtHPml)

Straub said on Monday that he would challenge the results if he lost the auction because the process lacked transparency.

Other bidders could include real estate developer Richard Meruelo, who expressed an interest in buying Revel Casino in a bankruptcy court last week, the WSJ said.

Two-year-old Revel Casino, which cost $2.4 billion to build and closed on Sept. 2, is among the four Atlantic City casinos that closed this year as neighboring states have embraced gambling to increase government revenue. (Reporting by Ankit Ajmera in Bangalore; Editing by Kirti Pandey)

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Detroit should be able to borrow after bankruptcy -consultant

By Lisa Lambert

DETROIT, Sept 30 Tue Sep 30, 2014 2:44pm EDT

DETROIT, Sept 30 (Reuters) - Detroit should be able to access capital markets and borrow at a rate of around 5 percent after it exits bankruptcy, as long as its tax revenue remains stable, a city consultant said on Tuesday.

But even as Kenneth Buckfire, president of restructuring firm Miller Buckfire & Co, testified about the factors that will help Detroit woo investors, he said the city will have to educate the municipal bond market about the "New Detroit," once it exits the largest-ever municipal bankruptcy.

Buckfire, in testimony in U.S. Bankruptcy Court, said that the markets will respond well to Detroit's paring of its liabilities from $10 billion to $3 billion, 10-year cost certainties, and post-bankruptcy oversight.

Judge Steven Rhodes is currently conducting a hearing to determine the fairness and feasibility of Detroit's bankruptcy plan, part of which includes a $325 million exit facility financed through Barclays.

The facility will first be a private placement of variable-rate notes with the bank for 150 days, after which Barclays will sell the debt publicly. That five-month period will give Detroit the opportunity to present its post-bankruptcy conditions to rating agencies and investors, Buckfire said.

According to Buckfire, 5 percent is within a reasonable range for Detroit to expect to pay in interest. That is lower than yields demanded by investors for debt of troubled credits such as Puerto Rico, but still accounts for some risks Detroit could confront, he said.

The bankruptcy plan lays out how Detroit will reduce employee pension and retiree healthcare costs, making the city a better credit than other municipalities that have not addressed those liabilities, Buckfire added.

"The fundamental risk the city is facing" in capital markets is uncertainty over the stability of its tax revenue, he said.

There are few indicators how the $3.7 trillion U.S. municipal bond market will greet borrowing by the city that broke all records on municipal bankruptcy.

Detroit in August sold $1.8 billion of sewer and water revenue bonds offered with mostly 5 percent coupons. The bonds, paid off with revenue from Detroit's regional system and largely insured, were snapped up by investors. Detroit has not issued any general obligation bonds since filing for bankruptcy in July 2013.

"It is too early to tell whether or not Detroit would be able to go back into the market and pay about 5 percent after coming out of bankruptcy," said Municipal Market Data analyst Daniel Berger. "Detroit is also hard to read because not much of its debt trades."

After filing for bankruptcy, the city defaulted on certain limited and unlimited-tax general obligation bonds it considered unsecured.

Buckfire said Barclays drew on the market to make a $120 million loan to Detroit earlier this year, and the deal was four times oversubscribed. He also said that with municipal issuance running low, there is strong buyer demand for bonds. Still, he repeatedly mentioned that reception will depend on how Detroit tells its "credit story."

Berger, of MMD, a Thomson Reuters company, said the 5 percent debt cost was "doubtful under current market conditions, but this market is hungry for tax-exempt, high-yield paper."

(Additional reporting by Karen Pierog in Chicago; Editing by Leslie Adler)

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UPDATE 1-Bidder for Atlantic City's Revel to contest auction if he loses

Mon Sep 29, 2014 7:03pm EDT

(Adds comment from White & Case attorney in paragraphs five and six)

By Tom Hals

Sept 29 (Reuters) - The Florida developer who entered the first bid in an auction for Atlantic City, New Jersey's Revel Casino Hotel, which closed its doors this month, said on Monday he plans to challenge the results if he loses, because the process lacked transparency.

The comments, by Glenn Straub, come as the auction for Revel, Atlantic City's newest casino complex, is scheduled to resume on Tuesday at 10 a.m. in a New York law office. The auction started last week with a $90 million cash bid by Straub but adjourned for the Jewish Rosh Hashanah holiday.

Straub complained the bidding lacked transparency and he did not even know how many qualified at last week's bid deadline, or how their proposals were being valued.

"I will challenge it," Straub said in a telephone interview. "You've got to be able say, 'people, you can't bid apples against oranges.'"

Revel's attorney, John Cunningham with White & Case, called the allegations "entirely false."

Cunningham said Straub had asked for details about other bidders during a court hearing earlier this month as part of a proposal to postpone the auction, but that Revel's team declined to make that concession.

Hanging in the balance is the two-year-old Revel, which cost $2.4 billion to build and closed on Sept. 2. The complex was meant to be a Las Vegas-style resort, but its fine dining, striking design and entertainment never caught on in a city that relies on bus tours and buffets.

Straub's said his attorney was filing papers to seek a court order staying the auction till Thursday and seeking a trustee to oversee the bidding, rather than Revel's attorneys at law firm White & Case. However, he said he did not expect the auction to be put on hold.

Straub feared Revel's legal team was colluding with other bidders, according to a court filing obtained from Straub's attorney Craig Galle, who said a paper copy of the filing was submitted to the court.

"This entire auction proceeding is highly suspect, and, given the appearance of impropriety and lack of open communication, tainted at best," said the document.

Cunningham, Revel's attorney, said he had not seen the filing.

A hearing to approve the sale to the winning bid is set for Oct. 7 in front of Judge Gloria Burns of the U.S. bankruptcy court in Camden, New Jersey, where the Chapter 11 was being handled.

Revel agreed to use Straub's initial bid to set the benchmark for other potential buyers, which have not been publicly identified. The Florida developer has said he wants to create a university at the site to gather the world's brightest minds to tackle ills such as hunger.

Four Atlantic City casinos have closed this year as neighboring states have embraced gambling to pump up government revenue. The city had 12 casinos at the start of 2014.

The case is In Re: Revel AC Inc., U.S. Bankruptcy Court, District of New Jersey, No. 14-22654 (Reporting by Tom Hals in Wilmington, Delaware; Editing by Steve Orlofsky, Bernard Orr)

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