Sep 12, 2023
Atalian to Start Refinancing Talks as €1.2 Billion Debt Looms
, Bloomberg News
(Bloomberg) -- Atalian SASU is preparing to start refinancing talks with creditors this month as more than €1.2 billion ($1.3 billion) of debt repayments loom for the French cleaning and facility management services firm.
The company will show a business plan to noteholders and banks at the end of September and open discussions to amend and extend the maturity of its bonds due in 2024 and 2025, according to people familiar with the situation, who asked not to be identified because the information is private.
After battling with a drop in revenue following the loss of contracts in its home market, the firm was able to show increased profit and improved margins when it reported second-quarter earnings in July. Even so, the firm has a debt rating deep in junk territory and the bonds quoted at a discount of more than 20%, which would make a refinancing of existing debt with new debt expensive.
Instead, the plan is to repay part of the bonds and extend the maturity of the rest, according to the people familiar.
Atalian will also seek to sign a new revolving credit line. The company has a €625 million note due in May next year, and a €612 million-equivalent bond in May 2025.
A spokesperson for Atalian declined to comment.
The firm booked €753 million from the sale of its UK, Ireland and Asia operations to CD&R in February, using part of the money to repay in full a revolver facility with banks that matured in April. Even so, the company unnerved bond investors a month later when it pushed back its plans to refinance its short-term debt.
With talks on the refinancing plan approaching, a group of bondholders hired Weil, Gotshal & Manges LLP as legal adviser, and are looking to mandate a financial adviser by early next week, two of the people said. The company is working with law firm White & Case LLP.
In May, Atalian appointed Maximilien Pellegrini, then deputy chief executive officer of the Suez Group, as CEO to focus on developing the facilities management business and push through its refinancing strategy.
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