LONDON Feb 5 Lenders to Vivarte have appointed
financial advisory firm Houlihan Lokey after rejecting the
French retailer's request to suspend loan covenant tests,
banking sources said on Wednesday.
The move comes after a French court approved representative
was appointed to mediate talks between Vivarte and its lenders.
Vivarte failed to get agreement from two-thirds of its lenders
to ignore a breach of its covenants and suspend further tests by
a deadline of Jan. 22 [ID: nL5N0L33VS]
Law firm Willkie Farr & Gallagher has also been appointed to
advise non-consenting lenders, the sources said.
A lender meeting is due to take place on Feb. 11 to discuss
possible options to resolve the stalemate, the sources added.
Houlihan declined to comment. Willkie Farr and Vivarte were
not immediately available to comment.
Private equity firm Charterhouse, bought Vivarte in 2007,
backed by 3.43 billion euros ($4.68 billion) of leveraged loans,
but has struggled to manage its debt in an unfavourable economic
and consumer environment in France.
Vivarte asked lenders to suspend its covenant tests in a
'covenant holiday' in December to buy time to implement plans
that would improve its business trading performance.
Vivarte's loans have fallen on Europe's secondary loan
market as lenders sell out of the debt to avoid potential
Vivarte's unextended term loans were quoted at 75.25 percent
of face value on Wednesday, over 10 points lower than 85.6 on
January 1, according to Thomson Reuters LPC data.
An extended term loan was quoted at 74.96 on Wednesday, from
83 on January 1, the data shows.