Bloomberg News

Seat Pagine Starts Debt Talks, Says Creditors Open to Solutions

August 30, 2011

Aug. 30 (Bloomberg) -- Seat Pagine Gialle SpA said it began talks on debt restructuring after bondholders showed they’re open to considering “solutions” to restoring Italy’s largest phone-directory publisher to financial health.

Investors in the so-called “Lighthouse” bond have started negotiations through their adviser, Lazard Ltd., the Turin-based company said in a statement today.

Senior lender Royal Bank of Scotland Group Plc and a group of senior secured-note holders indicated they’re willing to consider how to stabilize Seat Pagine’s long-term financial structure, and “this is a positive response for the effective management of the negotiation process,” the publisher said.

Seat Pagine’s net debt at the end of June was 2.68 billion euros ($3.87 billion), compared with 2.73 billion euros as of Dec. 31. The company hired Rothschild in May as adviser to reorganize its debt. Lighthouse is a 1.3 billion-euro junior bond.

The publisher’s strategic guidelines for 2011 through 2013, which its board approved today, will provide “an immediate impetus” to the negotiations, with further terms for the talks to be agreed on with the creditors in coming months, Seat Pagine said.

The company’s first-half net loss widened to 32.6 million euros from a restated loss of 8.4 million euros a year earlier, Seat Pagine said today. Revenue fell 6.3 percent to 433.2 million euros, and operating profit dropped 23 percent to 92.9 million euros.

Seat Pagine fell as much as 2.9 percent to 4.95 euro cents and was down 2.8 percent at 4.96 cents as of 10:39 a.m. in Milan trading. The stock has dropped 40 percent this year.

The capital-restructuring process “will take a long time to be finalized and will determine in our view a higher volatility of the stock, also because such a process is very likely to include a capital increase,” Marco Greco, a Milan- based analyst at Mediobanca SpA, said today in a report.

--With assistance from Patricia Kuo in London. Editors: Tom Lavell, Robert Valpuesta

To contact the reporter on this story: Chiara Remondini in Milan at cremondini@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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