Warsaw-based GTC is seeking bondholder consent to extend grace periods for repayment contingent on the company’s credit grade, according to a letter published late Friday. That’s necessary to avoid having to repay the forint bonds early following credit downgrades.
Holders of GTC’s 2030 and 2031 forint bonds have until 2 p.m. CET on Monday to vote on the request. Fitch Ratings downgraded GTC’s debt to B from BB in July, citing refinancing risks tied to a €500 million ($589 million) note maturing in 2026. Scope Ratings cut GTC in August to B- from B . Both ratings carry a negative outlook.
The Hungarian state audit office earlier this year exposed lax financial oversight, the covering up of losses and decisions rife with conflict of interest at the central bank’s foundation, which was set up under former Governor Gyorgy Matolcsy.
The new management under Governor Mihaly Varga, which took over in March, pressed charges on suspected fraud and misappropriation at the foundation following a comprehensive review of its activities. GTC’s management was overhauled earlier this month, which included the replacement of the company’s chief financial officer.
GTC’s euro-denominated bonds due in June 2026 are indicated at 91.8 cents on the euro, down almost two cents since Sept. 11, according to data compiled by Bloomberg.
GTC’s share price fell 1% to 3.98 zloty in Warsaw. The stock has more than halved since Optima Befektetesi Zrt., which manages the Hungarian central bank foundation’s assets, paid a premium to buy a majority stake in the commercial real estate developer in 2020. The state audit office estimated the unrealized loss at hundreds of millions of dollars.
GTC’s bondholder vote concerns its 2030 and 2031 forint notes, which were issued under the Hungarian central bank’s credit-for-growth program in 2020. The central bank itself purchased the majority of the bonds. GTC and Optima didn’t immediately reply to emailed questions seeking comment about the bond repayment plans.
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