Statement from Aurelius Capital Management, LP: Aurelius Supports NII’s Swift Emergence from Chapter 11

NEW YORK--()--Aurelius Capital Management, LP today issued the following statement regarding the commencement of Chapter 11 proceedings by NII Holdings, Inc. and certain of its U.S. and Luxembourg subsidiaries:

“The Reserve Plan would be the best of all worlds because it would”

"An Aurelius-managed entity is the largest holder of bonds due 2016 and 2019 issued by NII Capital Corp. and the second largest holder across all five series of NII bonds.

"Aurelius welcomes NII’s Chapter 11 case as a means to restore the Company to financial health and empower management to complete the Company’s operational turnaround. Over the last several months we have worked tirelessly with management toward that objective, and we remain dedicated to it.

"We have taken the lead among bondholders in supporting a plan that would allow the Company to emerge from Chapter 11 swiftly, by deferring until after emergence the resolution (through litigation or settlement) of many inter-creditor disputes. Aurelius was ready last week to enter into a binding agreement to support a plan (the “Reserve Plan”) that would have:

  • Converted all $4.35 billion of NII bonds into 100% of the reorganized company’s equity (before taking into account the rights offering mentioned below and any management incentive plan).
  • Allocated that equity among the bondholders in accordance with the absolute-priority rule.
  • Raised fresh equity through a rights offering. Aurelius offered to backstop $125 million of that rights offering.
  • Deferred all inter-creditor disputes until after NII emerges from Chapter 11. A portion of the new equity would be placed in reserve and released as each dispute is resolved, whether through litigation or settlement. (Any settlements reached before emergence would be taken into account in the initial distribution of shares at emergence.)

"The Reserve Plan would be the best of all worlds because it would:

  • Restore NII to financial health within a matter of months.
  • Enable bondholders a full and fair opportunity to resolve any inter-creditor disputes in an orderly way.
  • Honor the absolute priority rule as among bondholders.

"A bondholder group primarily holding bonds of NII’s Luxembourg subsidiary has opposed the Reserve Plan. Their opposition tells us that they (i) lack the courage of their convictions and (ii) hope to extract more by holding the Company hostage in Chapter 11 than they would if the inter-creditor disputes were resolved in a fair and orderly manner afterward.

"Aurelius wants to see NII flourish for the benefit of all bondholders. As to inter-creditor issues, we are content to trust the merits. We urge other bondholders to do likewise.

NOTE: Aurelius Capital Management, LP does not make any representation or undertake any duty. Nothing herein should be considered investment advice or a recommendation to buy or sell any securities."

Contacts

Prosek Partners
Brian Schaffer, 212-279-3115 x229
bschaffer@prosek.com
or
Hal Bienstock, 212-279-3115 x253
hbienstock@prosek.com

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