DealZone

Wrestling for control

wrestleDespite objections, and a rival bid from PAI Partners, a group of three distressed debt investors proved successful in their aggressive bid to wrestle control of French roofing company Monier through a debt for equity swap.

The restructuring deal sees Monier’s 1.9 billion euro debt load halved in exchange for senior lenders taking full ownership of the firm.

Previous owner PAI had its fingers prised from a prized asset through a combination of its rivals’ tight focus and a collapse in Monier’s earnings, which helped propel lenders into the driving seat.

Now, encouraged by the Monier deal, distressed debt investors will be running the rule over other firms, seeking out more “loan to own” opportunities amongst Europe’s heavily indebted corporates.

Until recently, many private equity firms’ strategy for such companies has been to stick it out and hope the recovery will come before banks call time on their underwater loans.

Heineken brews up loan-to-own deal

Distressed debt investors seek to pick out the diamonds in the rough, the good companies that can be turned around given a fair wind and the right management and capital structure.

These specialist investors buy up the debt of struggling companies aiming either to sell on the debt when the company recovers, or grab an equity stake if the company is forced to cut its borrowing via a debt-for-equity swap.

Stepping into this territory is Dutch brewer Heineken, which has bought up 49 percent of the debt of Globe Pub Company, a UK pub chain owned by property entrepreneur Robert Tchenguiz.