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LONDON, June 12 (Reuters) - Lenders are set to take control of UK vending machine business Autobar and conduct a restructuring that will wipe out a large portion of its debt in return for equity, banking sources said on Thursday.
Owner CVC was scheduled to present a financial restructuring proposal to lenders by June 15 but has opted instead to walk away from the business and is meeting with lenders on Thursday to discuss the matter, the sources said.
The company has struggled as a result of the economic downturn and the sector it is in, as consumers turned to more luxurious coffee and snack vendors, two sources close to the company said.
Lenders including York Capital Management and Angelo Gordon are expected to reduce debt to around 450 million euros ($612.68 million) from 900 million euros in return for equity, the sources said.
CVC declined to comment. York Capital Management and Angelo Gordon were not immediately available to comment.
A number of lenders to Autobar are selling out of their debt on Europe's secondary loan market to avoid losses in a restructuring.
Lenders had previously been restricted in selling loans due to a 'white list' that was in place. The 'white list' detailed a group of lenders that were the only ones able to vote on a proposed restructuring of Autobar.
"CVC is walking away from the company so the white list no longer applies. There have been a lot of lenders trying to sell out of the loans this week," a secondary loan trader said.
The latest auction to come to the market includes a 24 million euro-equivalent block on loans split between 22.9 million euros and 1.3 million pounds ($2.18 million). Bids are due by 3.25pm on Thursday, sources said.
Autobar's loans were quote at around 82 percent of face value on Thursday, according to Thomson Reuters LPC data.
CVC bought Autobar from Charterhouse in 2010 backed with 785 million euros of leveraged loans which were refinanced and increased in 2012, according to Thomson Reuters LPC data. ($1 = 0.7345 Euros) ($1 = 0.5956 British Pounds) (Editing by Christopher Mangham)