Atalian Working With Messier Maris & Associes, White & Case on Refi Options; Talks Focused on RCF Renegotiations

French facility manager Atalian is working with financial advisors at Messier Maris & Associes and legal advisers at White & Case to explore refinancing options.

The advisors are currently focused on renegotiating the group’s €103 million RCF, maturing on April 22, 2023, sources added.

Talks to tackle Atalian’s other upcoming maturities in 2024 and 2025 are expected to progress when new CEO Maximilien Pellegrini begins his role on May 2, sources noted.

The group has €625 million 4% senior notes due 2024 and €350 million 5.125% senior notes due 2025 and £225 million 6.625% senior notes due 2025 outstanding.

Atalian has previously stated it will repay its RCF using some of the €753 million proceeds from the sale of its U.K., Ireland and Asia activities, including Aktrion, to CD&R in December.

That asset sale raised approximately €698 million in cash for Atalian, with the remaining €55 million paid in the form of a two-year vendor loan note, as reported. Atalian also said it would use proceeds to deleverage the company and its subsidiaries, in particular paying off part of the 2024 notes.

Recovery prospects for the 2025 notes were thrown into doubt when Atalian said in December that CD&R would buy the chosen assets, not the whole group, dashing bondholder’s hopes of redemption at or above par as was previously expected.

Some sources suggested the company could try to tender some of the notes or offer an exchange to bondholders or alternatively pay the debt down partially and extend the rest of the debt by roughly two years.

In December, ratings agency S&P downgraded Atalian to a “B-” from a “B”, and affirmed the rating in March. It expected weaker operating performance in 2022 and 2023, due to worsening macroeconomic conditions and operating challenges in some geographies.

S&P said the CD&R proceeds will help with liquidity and near-term debt maturities. But the ratings agency expects leverage to remain elevated in 2023, at 8.5x-9x, declining to 7x-7.5x in 2024 as the company restores profitability in France and the U.S.

The ratings agency expects free operating cash flow, or FOCF, after leases to breakeven in 2024, after negative €55 million to negative €60 million in 2023.

Atalian and Messier Maris & Associes did not wish to comment, while White & Case did not respond to Reorg’s request for comment.

Atalian said Thursday it will publish fourth-quarter and full-year 2022 results on April 28.

The company’s capital structure is below:
 

– Andrew Ross, Declan Bush