Banks Offload Colisee Debt Ahead of Restructuring Deadline | Company Business News

(Bloomberg) — Some bank lenders to Colisee Group SAS are offloading their exposure to the cash-strapped care home operator at steep discounts, as an August deadline looms over restructuring talks between the firm and its debt holders. 

A €20 million ($23.4 million) portion of the EQT-owned company’s revolving credit facility was sold recently at a price below 60 cents on the euro, according to people familiar with the matter. There have been several similar trades executed lately, the people added, asking not to be identified as the matter is private.

The deeply discounted sales come amid increasingly tense negotiations between the French firm, its private equity sponsor and fund managers that own Colisee’s €1.17 billion of term loans over how to rework its debt stack. What was expected to be a relatively quick process has turned into a tussle between EQT and Colisee’s lenders.

The deadline for an agreement is in mid-August, according to the people. Colisee is currently in a “conciliation procedure,” a French pre-insolvency process that aims to get a company and its lenders to agree on a restructuring proposal. The process usually last no longer than five months, and if a conclusion isn’t reached in that time, another attempt can’t be initiated for another three months.

Questions remain as to how long the company has before it runs out of cash, given it had to defer an interest payment due under its term loan earlier this year.

Representatives for Colisee and EQT declined to comment. 

EQT had initially offered to inject over €200 million of cash in exchange for the lenders converting around a third of the loan in equity. And while the private equity owner has tweaked its proposal since then, term loan holders still disagree over the treatment of the revolving credit facility and the amount of support from EQT, the people familiar said.

With this in mind, creditors are working on a lender-led plan for the company, some of the people said.

–With assistance from Libby Cherry.

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