Europcar Working With Rothschild as FA; DIA’s 2021, 2023 Holders View DEA Finance Tender Offer Favorably; Schmolz+Bickenbach Working With PJT

French car rental group Europcar is working with Rothschild as its financial advisor for its debt restructuring, but it’s unclear whether the mandate is for a debt restructuring or a holistic review of the company’s capital structure. Continue reading for the EMEA Core Credit by Reorg team's weekly update on Europcar, DIA and more, and request a trial to access coverage of other debt restructuring.

During the last call with investors on July 28, Europcar’s management reiterated that the company was evaluating short and long-term alternatives to address its capital structure and liquidity constraints.

Some holders of DIA’s €300 million 2021 and 2023 notes have expressed a positive opinion about DEA Finance’s recent tender offer. Investors said they expect a significant number of holders tendering their notes in the higher ranges of the modified Dutch auction.

Under the tender offer, which began on Aug. 10 and expires on Sept. 4 and was launched by DEA Finance, a subsidiary of DIA’s owner LetterOne, the 2023 noteholders would receive between 60% and 70% of the bond’s nominal value to be determined via a modified Dutch auction. Holders of the €300 million 2021 notes would receive between 91% and 94% under the same tender offer. The offer aims to purchase up to €225 million out of outstanding €300 million 2021 notes and up to €225 million out of outstanding €300 million 2023 notes.

It’s unclear what would happen with the outstanding amount of the notes after the conclusion of the tender offer. Some investors suggest that LetterOne may combine the remaining outstanding amount of the bonds, which would be €75 million under each bond if the maximum amount is tendered, into one note with an extended maturity and a higher coupon.

Swiss steelmaker Schmolz+Bickenbach is being advised by PJT Partners as the company engages with lenders and investors to find a long-term sustainable financing structure for the business. Management told analysts during an Aug. 12 earnings call that it has received a commitment from its banks to grant the group sufficient time to close its financing gap.

Recently a €70 million piece of the company’s €465 million RCF traded at 30. In June, two banks attempted to offload pieces of the RCF at 50.

 

U.K. landlord Intu has resolved to wind up its subsidiary Intu (Jersey) 2 Limited, the issuer of the UK retail landlord’s £375 million convertible bonds, and nominate Michael Robert Pink and Linda Johnson of KPMG as joint liquidators of the company. All persons having claims against the company are requested to send details of these to the joint liquidators no later than Tuesday, Sept. 22.

The convertible notes are unsecured and structurally subordinated to the debt at the propcos, which benefit from specific assets pledged as security.

Bonds of Swiss bakery business Aryzta have dropped a few points after the company’s chairman Gary McGann agreed to step down from his position on Sept. 16. The group’s €250 million perpetual notes paying a coupon of 6.77% + five-year Euro swap rate are indicated at about 89/90 from 93 at the beginning of this week and mid-80s at the end of July, while its CHF 400 million perpetual notes are quoted at 79/83.

On Thursday afternoon, Aryzta rejected allegations made by an activist shareholder group, which said that the company made misleading statements in its extraordinary general meeting invitation.

Abengoa SA has filed for pre-concurso under article 5 bis of Spain’s insolvency law, the company’s board of directors said on Tuesday, Aug. 18. The filing will exclusively affect Abengoa SA, and does not extend to other companies in the group such as the new holdco, Abengoa Abenewco 1, nor the agreement announced on Aug. 6.

As per Spain’s insolvency law, the next step for Abengoa SA is to try to reach a restructuring agreement with creditors within three months, which can be extended by another month. If an agreement is not achieved, the insolvent company will then have to file for a full bankruptcy process, or concurso.

Investors are evaluating the likelihood that U.K. department chain Debenhams is heading towards liquidation as signs for a sale process do not look promising.

The retailer has appointed advisory firm Hilco Capital, which specializes in winding down retailers, to draw up a contingency plan for a possible liquidation, the company confirmed to Reorg. The retailer is also working with Lazard to assist the company and the administrators in assessing options including a solvent outcome.

U.K. Italian food chain Pizza Express has proposed a CVA to its unsecured creditors, including landlords, to reduce the company’s estate and rent expenses, the restaurant chain announced on Tuesday, Aug. 18.

The CVA creditors’ meeting will be held virtually on Sept. 4. To become effective, the CVA requires approval by a majority of 75% or more in value of all unsecured creditors and at least 50% in value of creditors that are unconnected with the company.

Bondholders under both of the company's sets of notes have previously agreed to amend the bonds, so the launch of the CVA will not result in an event of default.

Comdata's lenders have approved the company's covenant waiver request, sources told Reorg on Monday Aug. 17. The Italian BPO services provider is expected to present a new business plan in September.

Oil and gas service group KCA Deutag has received sufficient bondholder support for its proposed debt restructuring to amend the terms of the notes and change the governing law from New York to English law.

The company has received consent from investors holding 92.8% of the 7.25% senior secured 2021 notes, 99.1% of the 9.875% 2022 notes and 99% of the 9.625% 2023s. The company’s lock-up agreement has also been executed by investors holding more than 85% of KCA’s total commitments under the credit agreement, including the working capital facility.

Premier Oil and a group of creditors holding 45% of the company’s debt have reached an agreement on the heads of terms for a long-term refinancing.

Under the agreement, Premier's $2.9 billion of gross committed debt facilities including Letters of Credit to be refinanced with non-amortizing facilities, extending the group's credit maturities from May 2021 to March 2025.

The covenant profile will be reset to provide sufficient headroom in a prolonged lower commodity price environment, while the harmonized interest rate will increase to 8.34%. The proposal features an equity raise of $230 million to fund the proposed BP acquisitions and a further $300 million of new equity concurrently raised to reduce debt. Of the new $300 million, $205 million will be underwritten by Premier's senior creditors who would convert existing debt into equity to the extent that the $300 million is not raised from existing shareholders in a pre-emptive offer or from new investors.