PAI struggles to agree with Monier Group's lenders

Private equity group PAI Partners is reportedly being challenged for its stake in Germany-based building materials company Monier Group (formerly Lafarge Roofing) by a group of distressed debt investors.

Lenders to the troubled business turned down PAI's proposed debt-for-equity swap, which would have given them a 24% stake in the company in exchange for a slash in debt from EUR1.7bn to EUR600m; reportedly wanting a larger stake in the company for the amount of debt being written off.

It has been reported that a formal counter offer is expected soon and that Apollo Management, TowerBrook Capital and York Capital, which own about 40% of Monier's debt, made an informal alternative offer last week.

The company has until June 30 to make its interest payment and is thought to be possibly breaching covenants after a sharp decline in its EBITDA.

In 2006, PAI backed the buyout of Monier Group in a deal valued at EUR2.4bn, while Lafarge retained a 35% stake in the business. BNP Paribas and JP Morgan provided EUR1.67bn of senior debt and EUR300m of second lien debt to support the deal.

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