Banks pull the plug on Hastie recapitalisation deal
(29 May 2012 – Australia) The decision by a syndicate of banks led by Westpac to appoint receivers to Hastie Group, will result in the break-up of one of Australia’s largest providers of air conditioning and refrigeration systems.
Hastie Group had been hanging on by a thread since December, when it announced a restructure due to overruns in its Middle East business.
Since then Westpac was understood to have been playing hardball in various negotiations relating to debt covenants.
Hastie had been working on a new recapitalisation deal, which would have involved the banks taking a haircut. But when allegations of fraud to the tune of A$20 million serviced last week, followed by the resignation of two directors - one of whom represents one of the company's biggest shareholders, Lazard Private Equity - the banks, led by Westpac, decided to call it a day.
A group of banks, including ANZ Bank, Bank of Scotland and HSBC were supportive of a bailout, but Westpac, who was later backed by Commonwealth Bank and National Australia Bank, pulled the plug.
Since then Westpac was understood to have been playing hardball in various negotiations relating to debt covenants.
Hastie had been working on a new recapitalisation deal, which would have involved the banks taking a haircut. But when allegations of fraud to the tune of A$20 million serviced last week, followed by the resignation of two directors - one of whom represents one of the company's biggest shareholders, Lazard Private Equity - the banks, led by Westpac, decided to call it a day.
A group of banks, including ANZ Bank, Bank of Scotland and HSBC were supportive of a bailout, but Westpac, who was later backed by Commonwealth Bank and National Australia Bank, pulled the plug.
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