Vivarte Loans Said to Fall After Hiring Debt-Restructure Expertby and
Vivarte SAS loans plunged after the French fashion retailer appointed a debt restructuring adviser, according to two people familiar with the matter.
The company’s 800 million euros ($880 million) of loans are quoted at about 17 cents on the euro, down from about 32 cents on Friday, said the people, who asked not to be identified because trading is private. A French court on Monday approved the appointment of restructuring expert Helene Bourbouloux to help the Paris-based retailer in negotiations, two other people said.
Vivarte, which reorganized debt in 2014, has cut its annual earnings forecast by almost half because terrorist attacks in France and unseasonable weather have weighed on sales, the people said. Competitor IKKS Group SAS was lowered further into junk by S&P Global Ratings on Tuesday due to similar concerns.
A Vivarte official declined to comment on loan prices, debt talks and earnings forecasts. Bourbouloux didn’t immediately return calls seeking comment on the appointment.
The company expects 75 million euros of earnings before interest, taxes, depreciation and amortization in the year ending August, versus an initial forecast of 140 million euros, the people said. Weak performance at shoe-retail arm La Halle contributed to the lower expectations, they said.
Chief Executive Officer Stephane Maquaire, who joined Vivarte in May, will work with Bourbouloux to reach an agreement with creditors, the people said. Les Echos reported the expert’s role and the start of debt discussions on Monday.
Bourbouloux also negotiated the 2014 restructuring, which pared debt from 2.8 billion euros and saw private equity owner Charterhouse Capital Partners hand control to lenders including Alcentra Ltd., Babson Capital Management LLC, Oaktree Capital Group LLC and Goldentree Asset Management LLC.