PARIS — Vivarte said on Tuesday it has suspended loan payments while it renegotiates some 2.8 billion euros, or $3.82 billion at current exchange, of debt with a group of 172 lenders.
The French retail group, owner of brands including Kookaï, Caroll, Naf Naf and Chevignon, held its first information meeting for the lenders since an ad hoc legal agent was appointed to mediate the rescaling of its debt, dating back to the company’s sale to Charterhouse Capital Partners in 2007 via leveraged buyout.
“This deal created an acquisition debt, of which 2.8 billion euros remain held by the group’s acquisition holdings. The group already paid out 1.1 billion euros to the pool of lenders since 2007, most of which in the form of interest payments,” the company said.
Vivarte had contacted the lenders individually to request a waiver, but only 65.1 percent approved the measure, just short of the 66.6 percent of votes required. The group is battling a morose economic climate with an all-out effort to renovate and reinvigorate its key banners.
“In an extremely competitive environment affected by declining consumer spending, Vivarte’s management chose to protect the group’s liquidity position and its room for maneuver by prioritizing business operations and the transformation plan that is required to maintain the competitiveness of its 16 banners, supported by its 22,000 employees,” it said.
“That’s why Vivarte decided to postpone any payment due to lenders related to the acquisition debt taken on by its financial holdings in 2007 in order to maintain a satisfactory liquidity position. Vivarte thus plans to have at least 300 million euros’ liquidity available during the time of the talks with lenders,” Vivarte added.
The group now hopes its lenders will form a working group and designate a single negotiator for the talks to continue. A spokeswoman for Charterhouse said it continued to fully support the management of Vivarte.