(Adds finance minister comment, background) VIENNA, Oct 14 (Reuters) - A group of creditors representing claims of more than 2.5 billion euros ($2.9 billion) against Austrian “bad bank” Heta condemned on Wednesday a draft law on a settlement with the German state of Bavaria and said it would fight Vienna’s plan. Austria’s parliament is expected to pass a bill on Thursday to implement a settlement reached with Bavaria, the former owner of Heta’s predecessor Hypo Alpe Adria, by paying 1.23 billion euros, or 45 percent of Bavaria’s claims. In addition to money from selling Heta assets, the bill would also pave the way for federal loans to help Hypo’s home province of Carinthia pay investors by buying back debt. Officials have remained silent on the size of losses that other creditors likely face. However, Finance Minister Hans Joerg Schelling has said the Bavaria settlement cannot be viewed as an indicator of what others can expect, leading some to fear they will get less favourable terms. Legal attempts to solve Hypo Alpe Adria’s failure have run into difficulties. In July, Austria’s highest court overturned a law that had cancelled almost a billion euros of Hypo debt. “The federal government still proceeds without any involvement of the creditors,” said the group, which includes Germany’s Commerzbank, on Wednesday. “The creditors will fight this plan of action by all available means.” Lawyers representing Kaerntner Landesholding, a holding company in Carinthia, said last month the plans to buy back debt guaranteed by Carinthia had received “no negative comment” from creditors bar one. “This buyback model results in us ensuring that we get Carinthia out of their guarantees,” Schelling told parliament on Wednesday. Carinthia, whose credit ratings have suffered under the Hypo scandal, has guaranteed around 11 billion euros in Hypo debt, the equivalent of five times its annual budget. The creditors in their statement on Wednesday, calling themselves Ad Hoc group, said they saw the Bavaria settlement as preferential treatment of one creditor at the expense of others. “We will oppose all special legislation which devalues the statutory guarantees of Carinthia ... in front of the European Court of Justice, by international investment arbitration or if necessary in front of the European Court of Human Rights.” A settlement with Heta creditors such as the Ad Hoc group must be reached before a debt repayment moratorium runs out at the end of May. $1 = 0.8769 euros Reporting by Francois Murphy and Shadia Nasralla; Editing by Louise Heavens and Mark Potter
Austria 's parliament is expected to pass a bill today to implement a settlement with Bavaria , the former owner of Hype ##n AG , by paying € 1.23bn ( $ 1.4bn ) , or 45 % of Bavaria 's debt , as well as paving the way for federal loans to help the Alpe Adria 's home province of Carinthia pay investors , by buying back debt . However , a group of creditors with over € 2.5bn ( $ 2.9bn ) against Austria 's bad bank , Heta , originally Hypo Alpe Adria , have opposed the law , and say they are fighting the plan .