LONDON Nov 2 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
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)