LBO France’s Terreal taken over by creditors

Creditors including Goldman Sachs, ING and Park Square Capital have taken over at the helm of the company, weighed down by a heavy debt burden. The aforementioned lenders are to hold a combined stake of 50% in the firm, with remaining creditors holding the balance.

The restructuring will see Terreal's debt reduced by half, with senior debt written down from €486m to €300m and junior PIK notes reduced from €550m to €157.5m, reports say.

The takeover was anticipated, said a source close the situation, with shareholders and LBO France investors aware of developments ahead of time. Industrial players and turnaround investors had expressed interest in the company, though a debt-for-equity swap was favoured by creditors. 

LBO France redeemed 40% of its invested equity in 2007 as part of a dividend recapitalisation, softening the blow for investors. The investment was completed through White Knight VI, which has enjoyed a 2-2.5x money multiple and IRR of around 60%.

In 2009, Terreal was understood to have defaulted on its €915m senior loan arranged by ING. The restructuring was completed upon the assumption of an economic rebound, a source confirmed. While a recovery was noticed in 2010 and early 2011, the onset of a double-dip recession was the final blow for the firm.

LBO France bought the company in an €860m secondary buyout from Carlyle and Eurazeo in 2005. The original debt stood at €795m, though LBO France was understood to have recapitalised the company to the tune of €915m.

The news follows hot on the heels of Bridgepoint Development Capital-backed Mezzo di Pasta's entry into a court-overseen safeguard procedure earlier this week. And at the start of this month Saur, the French water company backed by Axa Private Equity and FSI, was also taken over by its lenders.

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• Topics
• France
• France
• LBO France