Having slept on this, there is a further point that looks at the...

Having slept on this, there is a further point that looks at the debt situation from a slightly different angle.

The fund could sell off enough assets just to pay back the interest accruing debt portion only, but not repay the deferred interest until it is due in June 2014. Then you would simply leave the remainder of the fund as it is and most of the cashflow coming in past that point could either be retained and perhaps be put to use paying off some deferred interest early if they choose to do this.

The fund is well within its rights to do this, but for lenders to have their principle paid off but having to wait two years for the deferred interet is probably not the outcome the lenders would want. They would rather see the whole thing tidied up all at once.

Therefore I think there is at least some motivation for them to come to the table and listen to reasonable offers and probably accept some discount on the deferred interest to get it paid now. You would think they want out of there as well, especially if some of the 12 lenders are hungry for cash now and this would be a good way to raise it. Banks are currently looking for every opportunity to reduce their assets at present to bolster their capital ratios and if this sort of deal helped them to do so then they will be keen to get this off their books.

Interesting. Lots of different ways to look at this.