Barclays bids to swap Doux loan for controlling stake

Thu Jul 26, 2012 9:03am EDT

Related Topics

* Barclays would take 80 pct stake in Doux, says source

* Family/BNP would split remaining 20 pct

* Barclays would stay enough time to get group 'on track'

* Brittany court to review bids on Friday

By Christian Plumb

PARIS, July 26 (Reuters) - Barclays is proposing to swap a 140 million-euro ($169.73 million) loan to troubled French poultry group Doux for an 80 percent stake, though the bank wants to sell off parts of its holding to potential partners, a source close to the transaction said on Thursday.

Family-owned Doux's struggles - it is operating under court administration - have emerged as a headache both for Barclays as its main bank creditor and for the French government, which is grappling with job cuts in various industries.

Roughly 1,000 jobs will be cut whether a scheduled court hearing on Friday approves the Barclays plan or a competing one.

The main competing bid comes from the major firms in the French poultry sector, led by oilseed financial group Sofiproteol.

The group has put forward a joint offer to take over some of Doux's assets. But Sofiproteol would not take over Doux's debts, including debts to Barclays, as it would be part of a sale process following a bankruptcy not a continuation plan.

Chairman Charles Doux has held 80 percent ownership in the firm with his family, with the remainder held by French bank BNP Paribas. Under the Barclays proposal, Doux and BNP would split the remaining 20 percent of the company, although it is unclear how it would be divided, the source said.

Barclays would start out with 80 percent but "would eventually like to bring on other industrial and financial partners that make sense," the source said, adding the bank was likely to keep a majority.

The bank "would stay the amount of time needed to get the group back on track," the source said.

Barclays and Sofiproteol declined immediate comment.

A Brittany-based commercial court is due to hold a hearing on Friday to review the bids but the verdict on the future of Doux is not likely until next month at the earliest. The judge is set to adjourn its decision for further deliberation.

The new French Socialist government has been pushing for a buyer for the whole group to protect as many jobs as possible with French unemployment at its highest since 1999.

Although the government has no right to intervene in the final decision, it may play a role in the future of the company through its investment fund FSI and regional help to companies.

The Barclays offer "is more or less equivalent and actually a bit better than Sofiproteol's in terms of job protection," the source said, adding the government had adopted a neutral stance.

The source said Barclays would preserve 3,190 jobs out of a total of 4,195, including 711 temporary contracts, while Sofiproteol would only keep 3,078 jobs.

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