Nick Greiner, chairman of the board, used a new statement to the New Zealand Exchange (NZX) to explain: “The board of Blue Star would like to reiterate its belief that ‘if bondholders reject the offer, it would likely result in a complete loss of principal for bondholders’.”

The latest announcement follows a groundswell of hostility to the proposal among parts of the New Zealand investment community.

Blue Star group managing director Chris Mitchell told ProPrint: “The update was put out as we are concerned that a view was being advanced that a ‘No Vote’ would create an opportunity for bondholders to discuss a different structure with the banks.

“The board does not believe that will be the case, and as part of our process in informing the market around the amendment offer, we needed to clarify that point.”

Mitchell and chief financial officer Graeme Archer are currently taking part in a roadshow to outline the restructure to investors.

“The roadshows are going well. People are starting to understand the rationale and needs behind the restructure,” said Mitchell.

The latest market update is clear about the perceived risk for bondholders if they reject the offer.

According to Greiner: “The board’s expectation is that, following a ‘No Vote’, Blue Star’s banks will immediately move to protect their interests, likely through the appointment of a receiver (an outcome neither Blue Star nor the board can control or materially influence). In this scenario, it is probable that there would be no value recovery for bondholders.”

Blue Star announced the proposed restructure on 14 July. It needs 75% approval from bondholders at a meeting on 10 August to secure a $20m (NZ$25m) financial package.

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