Wind Hellas, Apax and TPG $1bn court case adjourned

Hossein Dabiri, Debtwire
14 February 2018

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The $1bn high court case involving liquidators of Hellas Telecommunications, Apax and Texas Pacific Group (TPG) surrounding the 2007 sale of the telecommunications business has been adjourned until Friday 16 February.

[The below story originally appeared in Unquote sister publication Debtwire]

The long-awaited substantive hearing in the high court over the dispute between the joint liquidators of Hellas (Luxembourg) SCA II (formerly referred to as Wind Hellas) and former sponsors of the bankrupt telco was adjourned yet again yesterday.

In a snap session held on 13 February, Mr Justice Hildyard told the audience that the parties will reconvene on Friday 16 February at 10:30am.

The hearing, expected to take up to six weeks, was initially due to kick off on 12 February, but the parties secured adjournments from Hildyard until yesterday in order to continue with their negotiations with a view to a possible settlement.

The joint liquidators of the defunct company are acting as claimants, while former sponsors TPG and Apax Partners (together with a number of their affiliates) appear as defendants.

The judge has taken over the case from Mr Justice Snowden, who heard the matter at the preliminary stages.

Joint liquidators Andrew Hosking and Bruce Mackay made court filings in the US last week in which they revealed that they had settled their dispute with other defendant TCW HT Co-Invest.

Joe Smouha QC, of Essex Court Chambers, represents the joint liquidators. Richard Jacobs QC, also of Essex Court Chambers, appears on behalf of TPG. Apax is represented by Robert Miles QC of 4 Stone Buildings.

The dispute is the result of the dramatic collapse of Wind Hellas after it was taken over in a leveraged buyout in February 2007, in which sponsors TPG and Apax Partners ceded control of Tim Hellas to Weather Investments, a stock corporation organised under the laws of Italy. The group's name was changed to Wind Hellas following the acquisition.

The liquidators accuse the former sponsors of having fraudulently stripped the company of all its value before selling it. They are seeking more than $1bn from the defendants.

They argue that TPG and Apax used the company to carry out the highly leveraged acquisition of a pair of Greek businesses, before causing the company to borrow well in excess of €1bn in additional funds that were then immediately "siphoned out" of the group "without consideration".

The private equity firms, on the other hand, argue that the disputed transaction took place in December 2006 in full transparency, at a time when the company was in a good financial situation and was valued at around €3.2bn. It was eventually sold to Weather for an enterprise value of roughly €3.4bn. They note that the sale was carried out two months after the disputed transaction and argue that the impact of the financial crisis of 2008, from which Greece suffered particularly, should be taken into account when looking at the reasons for the company's demise.