Advisers were locked in a meeting late last week to thrash out the details of the plan that must be sealed by March 17. A deal could be agreed in principle as early as this week, according to sources.
The recapitalisation deal will be hugely dilutive for existing shareholders and it is expected they will receive no consideration for their shares or, in a best case scenario, less than 5¢ a share, sources close to the deal said
One of the key sticking points has been the unwillingness of Westpac and NAB to take major equity stakes in the firm. Another lender, Citi, has already sold its debt to distressed debt buyers for 40¢ in the dollar. Sources said Westpac and NAB would be lucky to get more than 30¢ in the dollar for their debt.
