LONDON Jan 10 French clothing retailer Vivarte
has extended a deadline for lenders to agree to a covenant
holiday for a second time after a number of dissenting lenders
voted against the request and want better terms, banking sources
said on Friday.
Vivarte was bought by Charterhouse in 2007 backed by
leveraged loans totalling 3.43 billion euros ($4.69 billion),
but has been hit by an unfavourable economic and consumer
environment in France. [ID: nL6N0HU2M4]
A new deadline of January 22 has been set, extended from
January 10. Despite a number of lenders agreeing to the request,
it fell short of the two-thirds majority consent required for
the changes to go through. Nomura is advising on the deal.
Vivarte declined to comment.
Vivarte had already extended the deadline from December 19
and improved the incentives to lenders. [ID: nRLP34144a]
The borrower had asked lenders for a covenant holiday while
it implements a plan to improve its business trading
performance. In return, Vivarte said it would, among other
things, increase information flow to lenders and seek a private
rating from Moody's.
Vivarte has offered a payment-in-kind (PIK) margin uplift of
75 bps to extended lenders and 50 bps to unextended lenders.
Extended lenders were also offered a further 50 bps PIK margin
uplift after July 30 2014, if a covenant reset is not in place
by then. All lenders that agree will also receive a 25 bps
Some dissenting lenders want a shorter standstill period and
advisers appointed. They also want the same cash fee incentive
applied, irrespective of whether lenders are in the extended or
unextended debt, the sources said.
Vivarte's loans have been attracting attention from
investors on Europe's secondary loan market as lenders sell out
of the debt to avoid potential losses. The term loans were
trading at around 84.6 percent of face value on Friday,
according to Thomson Reuters LPC data.
(Editing by Christopher Mangham)