Private equity-backed French clothing retailer Vivarte is reportedly in talks with its lenders to reset its debt covenants to make its debts of €2bn more manageable.
The talks with banks and investors will focus on amending loan documents to prevent further covenant breaches, said Reuters, citing banking sources.
Vivarte’s private equity backer Charterhouse could provide equity funding to the business, said the sources.
The company breached covenants on its leveraged loans in May and breached August’s covenant tests, said the people, adding that lenders are “confident that a long-term solution can be found”.
“Vivarte is expected to have breached covenants again and we are prepared to enter talks with the company around this,” an investor told the publication.
Earlier this month it was reported that Charterhouse was looking to raise £165m through a dividend recapitalisation of portfolio company Card Factory following a failed sale process earlier this year.
The firm will now focus on refinancing The Card Factory rather than hold another sale or attempt to list on a stock market according to Reuters, which cited baking sources.
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