LONDON, Aug 5 (IFR) - Obrascon Huarte Lain’s bonds hit fresh lows on Friday after the Spanish construction firm’s statement on the shareholder agreement between its majority owner and minority holder Tyrus - a Monaco-based hedge fund.
OHL’s bonds dropped sharply, with its 400m 4.75% 2022 and 317m 5.50% 2023 notes both falling over four points to cash price bids of 55, according to Tradeweb.
Spanish news provider El Confidencial reported on Tuesday that under the terms of a deal struck last year by Grupo Villar Mir (GVM) with Tyrus Capital for the hedge fund to take an 8.37% stake in OHL, GVM has to compensate Tyrus for losses after OHL’s share drop. GVM is a holding company run by OHL’s chairman Juan Miguel Villar Mir.
When OHL detailed the key terms of the agreement in an October regulatory filing there was no mention of a price performance element.
OHL released a statement on Friday morning in relation to “the recent published news regarding the contract”, which said that GVM was complying with the terms of the agreement and neither party had any intention to terminate it before May 2017.
While the statement did not explicitly outline any terms around share price performance, it did use the phrase “performance of the contract”.
OHL bonds have now tumbled 15 points over the course of a torrid week, having first fallen on poor first-half results, then on an unexpected stock buyback announcement, and then on a Moody’s rating downgrade.
OHL’s bonds now yield between 17.5% and 20%. OHL’s shares have also taken a hit, falling more than 8% to 1.93 on Friday. (Reporting by Robert Smith, editing by Alex Chambers, Julian Baker)