Correction: Sarria - TCG CDS

All,

further to our email this morning: CDS is ultimately still set to be triggered.

- Contrary to our initial assessment, the primary motivation for merely changing the voting threshold via the schemes is not to avoid a trigger under the CDS (a coercive, but voluntary Exchange Offer afterwards might not trigger the CDS). But instead it is only to save time as the creditor group is still divided on any one deal and is unlikely to come to a decision before the latest possible vote on a scheme would take place to prevent the company from running out of cash in early October.

So to give themselves a couple of weeks more time, the company have launched the Scheme (takes 4-5 weeks) now and then can execute a consent solicitation thereafter with immediate effect.

The Exchange Offer - given the disarray - may need to include mandatory language to ensure that substantially all creditors covert into the new instruments. If so, and that is thought likely, that would trigger the CDS after all.

So in a nutshell the process would maintain all the aspects of the previously envisaged restructuring under Schemes of Arrangement, only in a format spread over various steps.

Question outstanding: Whether or not the recognition of the Schemes - for change of threshold only - under Ch15 would create a trigger in itself, while the bonds are still outstanding to be delivered. But the Ch15 filing is not in itself motivated to cater towards CDS considerations.

Wolfgang