Bloomberg News

Charterhouse Said to Request Elior Loan Extension Before Sale

March 22, 2013

Elior SCA, a French catering business owned by Charterhouse Capital Partners LLP, is seeking to extend almost 1.7 billion euros ($2.21 billion) of loans, according to three people with knowledge of the matter.

A year after extending its maturities to 2017, the company is asking lenders’ permission to postpone debt repayments to 2019 and waive change-of-control provision, said the people, who asked not to be identified because the matter is private.

The company is making an acquisition in the U.S. and wants permission to use some cash from its balance sheet to complete it, the people said. Elior also wants permission to to sell bonds to repay some of its senior loans. Private-equity firm Charterhouse hired Rothschild, HSBC Holdings Plc and Credit Agricole SA (ACA) to handle a sale process in November, people familar with then matter said at the time.

Gary Sunderland, head of information resources at London- based Charterhouse, didn’t reply to an e-mail seeking comment.

In the event Elior’s owner decided to take the company public, proceeds from the sale of shares will reduce borrowings to 3.25 times earnings before interest, taxes, depreciation and amortization.

Investors agreeing to waive Elior’s change of control are offered a fee of 25 basis points, said the people. Lenders agreeing to the debt extension by April 9 will earn 50 basis points and 25 basis points if they provide consent by April 16.

Staple Financing

The rate paid on the extended debt will be increased by 25 basis points, the people said.

Credit Agricole, HSBC, JPMorgan Chase & Co. and Nomura Holdings Inc. are handling the request. The same group of banks had previously arranged a so-called staple financing featuring bank debt as well as senior secured and subordinated bonds, one of the people said.

Charterhouse owns 62 percent of the company that controls Paris-based Elior, according to its website, while Elior co- founder Robert Zolade controls about 25 percent. Chequers Capital funds own about 8 percent.

Charterhouse was among a group of investors that paid 2.5 billion euros in 2006 for the business. Credit Agricole, Morgan Stanley and the bank then known as Merrill Lynch & Co. led lenders in providing about 2 billion euros of leveraged loans to back the 2006 buyout, according to data compiled by Bloomberg.

To contact the reporters on this story: Julie Miecamp in London at jmiecamp@bloomberg.net; Patricia Kuo in London at pkuo2@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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