Lenders to Wind Hellas have chosen the restructuring proposal put forward by the group’s previous shareholders, Weather Investment, snubbing a rival plan from junior creditors.

Sticking with the owners that led the Greek telecom operator to near-failure may seem strange, though it is probably the least risky of two imperfect options. But Wind Hellas still has too much debt.

Some sort of restructuring of Wind Hellas has been on the cards since the bottom fell out of the Greek mobile market this year. Hellas, loaded up with 3.2 billion euros of debt after an acquisition spree by owner Weather Investments, controlled by Naguib Sawiris, was unable to compete as it had to cut back on much needed investment. It finally ran out of money last month.

An attempt to sell the company produced two bids: one from Weather, which proposed injecting 124 million euros, and one from junior creditors, who wanted to put in 150 million euros or more and seize control. A majority of senior lenders approved Weather’s offer, even though they would have received more fees had they chosen the rival bid.

Still, picking Weather may turn out be the less risky of the two options facing the senior lenders. The Weather plan involves a higher budget for capital expenditure, crucial for restoring the company’s fortunes.

The junior plan offered more money, but would have involved a broader shareholder base, new management, and a risky corporate strategy based on future consolidation in the Greek market. This unnerved lenders, who are more worried about getting their money back in 2012, when most of Wind Hellas’ debt comes due.

Business relations with Weather, which controls a string of telecom operators, would also have helped. Equally, Weather is keen to protect its reputation with lenders.

The next step will be a pre-packaged administration in a UK court — made possible by Wind’s timely decision to move a parent company to London in August. That will leave the juniors bondholders with nothing. Their only option is to try and contest the plan, either arguing that they still have a stake in the company or contesting Wind’s right to use a UK court.

Another matter is whether the Weather business plan is achievable. By wiping out the junior creditors, Wind will save about 130 million euros a year of interest. It hopes that will be enough to stem the loss of market share and stabilize revenues.

The business plan forecasts a revenue decline of up to 8 percent next year, followed by a rebound in 2011. That looks optimistic, given that revenues declined 16 percent in the third quarter compared with a year earlier.

Even after the restructuring, Wind Hellas will still have 1.8 billion euros of senior debt, a hefty multiple of almost six times earnings before interest, tax, depreciation and amortisation. Weather’s proposed investment of 124 million in the company may not be the last.