If the hedge funds bought the debt at a discount the face value...

If the hedge funds bought the debt at a discount the face value is still the higher amount as stated in the books of AEJ.

If I bought 700m debt for 500m I would call the money when due date arrives as long as liquidation values are higher than my 500m of secured debt. Even thogh AEJ owes me 700m I would be happy with 550m at liquidation values with nothing left for the shareholders. Why bother to give them something and get equity in return when they can have their money and profit back now? A long term investment in energy in Australia? For a hedge fund? No way.

As I long as they purchase enough discounted debt maturing shortly to ensure AEJ can't make that payment without going into liquidation and the discounted debt is below liquidation values it works.

GPG are not the smartest guys in the room otherwise they'd have bought the discounted and secured debt.