LONDON - Junior bondholders are readying a lawsuit to challenge a restructuring deal for Greek mobile operator Wind Hellas that wipes out their investment, sources familiar with the process said.
Subordinated bondholders have appointed U.S. law firm Quinn Emanuel to contest last week's deal, which saw Wind Hellas's owner Weather Investments retain control of the group in return for a cash injection.
The official legal process could begin in either the UK or the U.S. in the next few days, the sources said.
The bondholders plan to attack Wind Hellas's move to establish a British base earlier this year, where courts may be more willing to wipe out junior lenders.
From the very start (Wind Hellas) has been committed to a very fair and open process, said a spokeswoman for Wind Hellas, adding that the boards of Wind Hellas and Weather Investments were two separate and independent entities.
Subordinated bondholders and Weather Investments submitted the only two formal bids in the debt-restructuring process, in which Wind Hellas spoke to 29 parties, including former owner private equity firm TPG, over several weeks.
Weather Investments, majority owned by Egyptian tycoon Naguib Sawiris, last week beat the proposal from junior creditors, as well as a late approach from PPF Partners, controlled by Czech billionaire Petr Kellner.
Some 30 bondholders holding close to 700 million euros ($1.05 billion) of Wind Hellas's 1.2 billion euros of bonds have now joined together to challenge that decision, one of the sources said.
The junior creditors are investigating the possibility of launching a suit through U.S. courts, which are seen as more favourable to creditors than Britain's, as the bonds are governed by New York law.
Subordinated bondholders, owed about 1.2 billion euros, believe their proposal was superior to Weather's bid, said Mike Hodges, European chief investment officer at Aladdin Capital, the firm coordinating junior creditors' activities. ($1=.6678 Euro) (Editing by Will Waterman)