RLPC-Saur lenders brace for losses as restructuring underway-sources
LONDON Nov 2 (Reuters) - Lenders to Saur SA are starting to book losses as the French water and waste management services firm hires a mediator to assist in talks to restructure its 1.8 billion euro ($2.3 billion) debt pile, people familiar with the process said.
One lender this week sold a 60 million euro block of senior ranking Saur loans to an investor specialising in distressed debt following the group's appointment of a so-called mandataire ad hoc - a court-appointed mediator to help find an agreement with lenders on how to restructure the loans.
Saur could not be reached for comment.
The 1.44 billion euro senior ranking loans are quoted at 63 percent of face value in secondary trading, according to Thomson Reuters LPC data, suggesting lenders are prepared to take an almost 40 percent loss on the debt if they sell.
A 175 million euro junior ranking loan is almost worthless at 10 percent of face value.
Saur - a sector peer to France's Veolia Environnement and Suez Environnement - is facing pressure on its earnings due to the economic slowdown which has hit the waste and environmental services sectors.
This has made it difficult to deal with its high debt burden, a portion of which needs to be refinanced by 2014.
The debt was put in place in 2007 when French state bank Caisse des Depots (CDS), waste treatment company Seche Environnement and two investment vehicles managed by AXA Private Equity acquired the business.
Axa Private Equity declined to comment, while the other shareholders were unavailable to comment.
A lender committee comprising of Bank of Tokyo-Mitsubishi, BNP Paribas, Natixis and Royal Bank of Scotland has been formed to co-ordinate the debt restructuring talks on behalf of the wider lending syndicate, banking sources said.
The appointment of a mandataire has become increasingly common in France over the last three years to help negotiate difficult talks with lenders. Mediation is not an insolvency procedure and is available to solvent companies.
French directories firm PagesJaunes appointed a mandataire in September to help amend its loans, while French building materials firm Materis achieved an amendment on its loans after the appointment of a mandataire. ($1 = 0.7730 euros) (Editing by David Cowell)
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