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Hedge Fund revolves more than a dozen necessary companies in France, since a number of economic shocks cause the growing number of companies to be painful restructuring.
Restructuring consultants and needy debt investors stated that they monitor the difficulties with medium and large cap companies, often in possession of Private equity Groups.
Two of the portfolio companies of EQT, Care provider Colisée and laboratory operator Cerba, either restructure their debts or consists of doing this. The real estate service business of Partners Group Emeria and the payment operator of Apollo are among other things from private equity, which must have the risk of restructuring, among other things, companies that are committed to the cases are familiar with the cases.
“Between 15 and 20 names are monitored. Everyone increases as a real potential situation due to lever or liquidity problems,” said a restructuring banker and added that the vast majority of private equity is.
“In Paris, no week passes without a debt fund in Great Britain or US debts to come to us,” said Olivier Sibenaler, restructuring expert in the advice of Alixpartner. “It has really been going on since the beginning of the year.”
Emeria, Ingenico, Colisée, EQT and Partners Group rejected a statement. Cerba did not respond to a request for comments.
The debt problems reflect the challenges in the French economy. According to the Bank of France, bankruptcies in France have been at the highest level since the beginning of the records in 1991.
Companies across Europe are fighting with a high level of debt and a lack of cash to pay rising interest rates if they refinance.
In France, however, the situation is particularly acute, where there is a relatively high number of companies with particularly large debt ports in endangered sectors such as retail and telecommunications as well as a catch-up effect of the Covid 19 pandemic, as many companies were protected with generous French state loans.
The number of leveraged buyouts – when private -equity groups acquire companies with large debts – is also much higher in France than elsewhere in Europe. Since 2015 there have been 4,675 LBOs in France compared to 2,786 in Germany and 1,749 in Italy.
Companies have exposed themselves to “multiplication of shocks”, said Celine Domenget-Morin, a restructuring lawyer in Paris near Weil, Gotshal & Mans. “They come through a first (shock) and a second and then they can no longer take it when a third comes,” they said.
The regulatory changes implemented in 2021 also affected the execution of restructuring. France passed the European insolvency legislation, which significantly weakened the shareholders’ hand compared to previous legal provisions.
The process leads to more antagonistic settlements between creditors, in which some lenders can now force others to restructure transactions through a process as “cross-class cramdown”.
The changes have provided a “tool” that makes France a more attractive place for some international credit investors, said Sibenaler.
Hedge Fund that invests in needy debts that are often based in the USA and Great Britain can acquire involved in desperate companies by converting their debts into equity through the restructuring process.
“We have exactly an eye on France,” said an investor in a European loan hedge fund. “There is a lot to do there”
France has already had a number of top -class restructuring situations in recent years, including retailers Casino, Care Home Provider Orpea and Telecoms Company Altice. Patrick Drahi’s Altis USA’s creditors are preparing for further restructuring, while the debts of the casino have dropped a little more than a year after its restructuring of 5 billion euros to deeply depressed levels.
After these major restructuring for listed companies, many companies from private equity groups are now increasingly susceptible.
Bloomberg data show that some conventional university loan investors have unloaded Colisée’s debt. “It will be desperate hedge funds on the other side of these transactions,” said an investor with high bonds.
The debt of the medical laboratory group Cerba also acts after a deterioration in performance at a needy level. The secured cerba bonds are traded with 76 cents with the euro, while its unsecured debts are traded against the euro with around 22 cents, since the lenders who have sold out severe losses are sold out.
Additional reporting from Alexandra Heal
