France's Electricité de France SA, or EDF, rejected a debt restructuring proposal from the administrators of Paladin Energy Ltd., saying the deal is not in the interest of creditors.
EDF also claimed that the proposal is unfairly prejudicial to the French utility, and it may seek to terminate the proposal if Paladin's creditors approve it at a Dec. 7 meeting.
According to the administrators, they have received only one proposal from a group of Paladin's unsecured bondholders.
If the creditors approve the proposal, the administrators anticipate completing recapitalization of the company before Jan. 31, 2018.
The proposal included a debt-for-equity swap allowing the transfer of 98% of Paladin's issued shares to creditors with existing shareholders retaining 2%, a capital raising of US$115 million through the issue of high-yield secured notes and reinstatement of company shares for trading on the ASX.
In October, EDF terminated a long-term supply agreement signed in 2012 after Paladin failed to pay US$277 million that became due Oct. 9.
Paladin was handed over to administrators in July, after EDF refused to grant a standstill to the company for the payment.