LONDON, Jan 10 (Reuters) - 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 consent fee.
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)