* Creditor group seeks all money owed by Carinthia province
* Carinthia expected to propose partial repayment plan
* Creditor group says willing to be paid over several years (Adds detail, quotes, background)
VIENNA, Dec 10 (Reuters) - The biggest group of creditors in Austrian “bad bank” Heta outlined a plan on Thursday for the province of Carinthia to repay them in full over several years, pre-empting an offer from the province expected to fall well short of total repayment.
Carinthia is hoping to finally draw a line under the collapse of Hypo Alpe Adria, the lender from which Heta Asset Resolution was formed last year and whose debt the province guaranteed.
Carinthia is preparing an offer to buy back Heta bonds covered by 11 billion euros ($12 billion) in guarantees. The offer is expected to be for significantly less than the guaranteed amount and will be financed by federal loans.
Presenting an outline of its counter-proposal, the Ad Hoc group of creditors, which says it represents claims of 2.5 billion euros and includes Germany’s Commerzbank, said it insisted on recovering the full guaranteed amount.
“We are absolutely wedded to the belief that they repay us in full,” said Dorian Lowell of advisory firm Gleacher Shacklock, which is acting for the Ad Hoc group.
The offer being prepared by Carinthia is based on a contribution by the province of 1.2 billion euros and the amount expected to be recovered from the winding down of Heta’s assets. Federal loans are expected to cover the whole offer.
Instead of an offer in which creditors’ bonds are bought immediately, the Ad Hoc group issued a presentation outlining its plans for an offer spread out over several years, based on items including Carinthia’s ability to pay over that period.
“We’re not interested in (Carinthia’s) assets. What we say is ‘What are you going to make in cash flow over the years?’” Lowell said. “That’s how you measure what we call debt capacity, and Carinthia’s got great debt capacity.”
The Ad Hoc group has said it opposes the process of the province’s offer and a law saying the offer is binding if creditors holding two-thirds of the debt accept it.
“That’s retroactive and it’s discriminatory and it’s confiscatory,” Lowell said. The group has pledged to take the case to the European Court of Human Rights if necessary.
A spokesman for the group, Leo Plank, said there had been no negotiations with Carinthia to date.
“We’ve consistently maintained an openness for dialogue,” Plank said. “We’re happy to talk to them, and if they don’t want to talk to us then we’ll continue to assert our rights and continue litigation and go further in litigation.”
$1 = 0.9131 euros Editing by Jeremy Gaunt and Mark Potter
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