Investors were told then that further repayments to preference shareholders were dependent on Harmoni being sold.
The point is that, in the event of liquidation, ordinary shareholders are wiped out first, then preference shareholders and only then bond-holders, depositors and so on.
Hermitage has a substantial investment in Transneft, and Browder has publicly criticised its president, Simon Vainshtock, for failing to look after the interests of preference shareholders.
Bankia announced that its preference shareholders would be forced to take a 39% "haircut" on the value of their investments, which they must exchange for ordinary shares.
Mr. Eden estimated that Barclays would almost certainly have to pay more to its preference shareholders than it would to the government.
The scheme is "win-win", says Roberto Terziani of Telemar: the owners swap power for a bigger economic stake, the preference shareholders do the reverse.Telemar's decision will probably start a negotiation in which preference shareholders now have a much stronger hand, says Alexandre Garcia of Ágora, a brokerage.
Depending on the precise terms, preference shareholders receive proceeds from the sale of a business, or from the liquidation of the assets of a failed company, before ordinary shareholders.
The hurdles that have to be jumped are high: there will be four separate votes of bondholders and preference shareholders, and the bank says that if any one of these doesn't succeed, the rescue will fail.
A similar deal is on offer to 9.25% preference shareholders, while investors with the 5.5% bonds will be offered a new bond paying 5.8% a year, but will lose nearly half of their underlying capital.
One reason why the holding company could be treated as a going concern was because the preference shareholders had waived their right to any shortfall if a disposal failed to raise sufficient funds to repay their debt in full.
