A three-way merger between ASX-listed Emeco and rival contractors Orionstone Holdings and Andy's Earthmovers is under threat from a dissident bondholder threatening to block a crucial creditors' vote on the deal.
As revealed by Street Talk, a New York fund - which is taking its counsel from Henry Davis York and has a large enough holding to block the creditors' scheme vote - was agitating for the spoils of the deal to be recut.
Sources said Emeco's camp were working through Tuesday night in an effort to have it resolved.
The creditors of Emeco's 2019 secured notes were due to attend the scheme meeting on Tuesday morning but Emeco has postponed the vote to Wednesday morning.
For the creditors' scheme vote to pass, it must be approved by more than 50 per cent of the voting noteholders, which together must represent at least 75 per cent of the total debts owing to the noteholders for each class of creditor.
Under the terms of the deal, Emeco's creditors will seize 34 per cent of the merged entity's equity, while Orionstone and Andy's creditors will emerge with 14 per cent and 6 per cent respectively.
Given the improvement in prices for commodities and mining-related equities since the values were bashed out mid-year, it is understood the fund, which has its head office in Connecticut, is chasing a bigger slice of the pie.
Goldman Sachs' special situation fund, Brookfield, Bain Capital Credit and New York-headquartered hedge fund Ascribe Capital are among Emeco's largest creditors and are said to be supportive.
On Monday, Emeco entered a trading halt and adjourned a shareholder vote on the merger, telling shareholders it wanted them to "have as much information as possible before them" when they came to vote.
The shareholder vote has been squeezed in on Wednesday afternoon following the adjourned creditors vote and narrowly ahead of the scheduled second federal court hearing required to implement the scheme on Thursday morning.
Emeco is proposing amendments to the scheme of arrangement at that meeting, including pushing out the calculation date, end date and implementation date.
It's not the first hiccup the deal has seen.
As revealed by Street Talk on November 1, Viburnum Funds, an Australian asset manager which owns a bunch of mining and construction-exposed companies, has made an unsolicited bid for Orionstone.
