Fri 07/31/2020 06:35 AM
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The below article is just a preview of the coverage available to current EMEA Core Credit by Reorg clients and trialists. Continue reading for the team's analysis of Curaeos's debt restructuring and liquidity, and request access to continue following

Dutch dental chain Curaeos will meet its lenders today to kick off discussions over a debt restructuring plan, sources told Reorg. Discussions are expected to focus on liquidity to support the company’s new business plan.

Debt negotiations will take a holistic review of the capital structure to make sure the company is not at risk of breaching a covenant under its RCF agreement as well as improving the company’s financial position so it can better defend market share in the Netherlands.

The group has hired Houlihan Lokey and Clifford Chance as financial and legal advisors, respectively, while lenders have mandated Latham & Watkins and PJT.

The group’s debt includes a €268 million first lien TLB paying Euribor+400 basis points and maturing on May 25, 2025. The company also has a €75 million revolving credit facility due May 23, 2024, with a 3.25% margin; and a €64 million second lien term loan maturing May 23, 2026, with a cash margin of E+7.5% and a PIK margin of 8.25%.

The RCF has a springing net debt to EBITDA covenant set at 10.8x when drawn more than 40%. As of Dec. 31, the covenant was not tested.

In January, the company’s sponsor EQT provided an equity cure in the range of €15 million to €20 million to reduce amounts drawn under the RCF, as reported. EQT is committed to Curaeos’ “buy-and-build” growth strategy. In December, €38 million outstanding of an €80 million shareholder loan to the company was converted into equity. A maximum of four cures are permitted over the life of the facility.

Debt Explained’s legal analysts have analyzed Curaeos’ May 2018 SFA. To see the full report or to talk to one of our legal analysts click HERE. You can get access to this product if you have a copy of the SFA.
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