RLPC-Vivarte agrees financial restructuring with lenders

LONDON, July 31 Thu Jul 31, 2014 9:45am EDT

LONDON, July 31 (Reuters) - French retailer Vivarte received unanimous lender consent on a restructuring that will see lenders take the business after agreeing to wipe out 2 billion euros (2.68 billion US dollar) of debt and inject new money, the business announced on Thursday.

All 116 lenders have agreed to reduce debt to 800 million euros from 2.8 billion euros and a new 500 million euro cash injection. The agreement was submitted to the Commercial Court of Paris, which will give its decision on Friday.

Oaktree, Alcentra, GoldenTree and Babson will be anchor shareholders in Vivarte following the restructuring.

The 500 million cash injection will be in the form of a new super senior term loan that will trade on Europe's secondary loan market with equity stapled to it, banking sources said.

The new term loan pays an interest margin of around 400 basis points (bps) cash and 700 bps payment-in-kind. It also has non-call two, which means it cannot be refinanced or repaid within two years, one of the bankers added.

The new term loan was quoted at around 107 percent of face value on Thursday, according to Thomson Reuters LPC data.

As part of the changes, Vivarte's board will include shareholders, management and industry experts.

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

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. It reached an agreement with 12 lenders on the financial restructuring in June, which was then put to the rest of the lenders. [ID: nL6N0OL3XI] (1 US dollar = 0.7472 euro) (Editing by Christopher Mangham)