RLPC-Investors compete for Vivarte restructuring

LONDON Wed May 14, 2014 9:36am EDT

LONDON May 14 (Reuters) - Five groups of lenders have submitted proposals to restructure struggling French retailer Vivarte's 2.8 billion euro ($3.85 billion) debt, the company announced on Wednesday.

Alcentra, Hayfin and Credit Suisse Asset Management have formed a group and submitted a restructuring proposal as did Angelo Gordon & Co with Avenue Capital Group and Sankaty Advisors. GoldenTree, ICG , Oaktree, Canyon, Babson and Oak Hill grouped together to submitted a proposal.

Elliot Advisor and Park Square submitted proposals on a standalone basis.

Vivarte's management will now discuss the different options with a 'Conciliateur' and decide which offer to go with by the end of June.

Private equity firm Charterhouse bought Vivarte in 2007, backed by 3.43 billion euros of leveraged loans, but has struggled to manage its debt in an unfavourable economic and consumer environment in France.

Vivarte needs a large portion of existing debt wiped out in return for equity, as well as an injection of fresh cash in a move that is expected to see Charterhouse walk away from its investment, banking sources said.

Vivarte entered into a four-month conciliation process with its lenders in March to negotiate a way forward after failing to get an agreement from a majority of its lenders to suspend loan covenant tests. A number of lenders submitted letters of intent on how to restructure Vivarte's debt last month and more formal offers were submitted last Friday

Vivarte is looking to reduce debt to a maximum of 1 billion euros. Proposals centre around the injection of 500 million euros of new cash either in the form of super senior loans or convertible bonds and writing off up to 2.3 billion euros of existing first lien and second lien debt, in return for equity, the banking sources said previously.

(Editing by Christopher Mangham)

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