Charterhouse's Bartec Plan Said to Meet Lender Resistance

A group of lenders to Charterhouse Capital Partners’ Bartec GmbH are resisting a request to relax debt terms at the oil and gas equipment maker, according to people familiar with the matter.

The group is trying to rally support and plans to hire legal advisers as soon as this week, said the people, who asked not to be identified because the matter is private. Allen & Overy and Kirkland & Ellis are among law firms seeking to win the mandate, they said.

Bartec’s representatives will meet lenders next week as the company seeks support from holders of at least 75 percent of its debt to amend terms in London courts, the people said. The Bad Mergentheim, Germany-based device maker wants a waiver from debt requirements as a collapse in crude prices has hammered demand for its safety equipment, causing earnings to trail forecasts.

It’s unclear how many lenders are planning to reject the proposal, the people said.

A spokesman for Charterhouse declined to comment on opposition to the plan. Officials at Allen & Overy and Kirkland & Ellis declined to comment on the possible mandate.

Charterhouse Offer

Bartec offered to increase loan margins by 200 basis points, which can be paid with more debt, and pledged to make a one-time payment of 50 basis points, other people with knowledge of the proposal said earlier this month. Charterhouse offered to provide 20 million euros ($23 million) in equity and 30 million euros in a senior loan.

The device maker is seeking to ease debt rules for 18 months and to extend loan maturities by more than two years to at least 2021. It intends to conclude a deal by early June. The company also plans to cut its reliance on the energy industry.

Bartec’s term loan due September 2019 is quoted at about 80 cents on the euro, according to two separate people with knowledge of the matter.

Charterhouse bought Bartec in 2012, financing the deal with about 348 million euros of loans. The equipment maker raised another 149 million euros in 2014, according to data compiled by Bloomberg. BNP Paribas SA and UniCredit SpA arranged the 2014 deal, the data show.

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