Elior Group, a French catering firm bought by Charterhouse Capital Partners LLP in 2006, received the minimum level of consent needed to extend the maturity of loans due in 2014 by three years, according to three people with direct knowledge of the request.
Lenders have until March 30 to respond to the proposals, which would extend the company’s term loans B and C to June 2017, as well as relax covenants on the debt, said the people, who declined to be identified as the terms are private. Elior has already obtained more than the minimum two-thirds consent required, the people said. The company took out about 1.2 billion euros ($1.6 billion) in B and C loans in 2006, according to data compiled by Bloomberg.
Investors have been offered an additional 250 basis points interest on the term loan B and 200 basis points interest on the term loan C, raising both margins to 450 basis points more than the euro interbank offered rate, the people said. Lenders will also receive a 50 basis-point extension fee and a 12.5 basis- point consent fee, the people said. Lenders who consented by last March 23 received an additional fee of 12.5 basis points. A basis point is 0.01 percentage point.
Charterhouse withdrew a similar proposal to extend Elior’s debt maturities by two years in May, saying that the increased interest margin demanded by some investors wasn’t justified. Anne-Isabelle Gros, a spokeswoman for Elior in Paris, declined to immediately comment.
Credit Agricole SA (ACA), Morgan Stanley and the former Merrill Lynch & Co. led lenders in providing about 2 billion euros of leveraged loans to back the buyout six years ago, according to data compiled by Bloomberg.
Elior, Europe’s third-largest contracted food-service provider, was founded in 1991 by Francis Markus and Robert Zolade. Zolade, backed by London-based Charterhouse, took the company private in 2006.
Term loans B and C are sold mainly to non-bank lenders such as collateralized loan obligations, bank loan mutual funds and hedge funds.
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