ISTC rescue plan approved (The Irish Times)
BANK AND trade creditors of Dublin specialist lender International Securities Trading Corporation (ISTC) have voted in favour of the scheme of arrangement to rescue the insolvent company.
The scheme was passed with around 69 per cent of the votes of international banks, which are owed €435.6 million, and trade creditors. Bank and trade creditors will receive 12 cent for every euro owed, forcing them to write off debts of €385 million.
A group of unsecured creditors, listed in the scheme under "subordinated liabilities", voted against the scheme at a separate meeting yesterday but they were outvoted by the value of the bank creditors.
These subordinated creditors include 125 bond investors who put €43 million into the firm through Friends First. The group, which also includes institutional and private bond investors in Europe and Asia, will have to write off €270.5 million. Including the €165 million invested in ISTC by wealthy Irish individuals, the total amount to be written off in ISTC comes to around €820 million.
The rescue plan, devised by ISTC's examiner John McStay must be approved by the High Court before the proposed sale of the firm to UK investment bank Collins Stewart for €5 million. The Competition Authority will also have to approve the scheme.
ISTC is the largest Irish casualty of the credit crunch.