Pilot episode

5 June 2009 By Pierre Briancon

PAI paid E2.4bn for Lafarge s roofing business in 2007. But leverage and recession are forcing the French private equity group out. Creditors, led by distressed debt investors, will cut debt in half, put in new money and take over. This won t be the last reworked European deal.

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Creditors or Monier are asked to vote this week on a radical restructuring plan put forward by the European roofing materials company's main lenders to oust current owner PAI, the French private equity fund, take over the company and cut its E2.1bn debt by half.

A steering committee of banks led by BNP Paribas has also agreed with a group of three distressed investors Apollo Management, TowerBrook Capital and York Capital, to put E150m of new money in the company in the form of a supersenior credit facility. The first tranche, for E45m, would have a maturity of three years and carry 7% over euribor, with payment in kind of 5%. The second tranche, for E105m, would have a maturity of five years and the same spread over euribor, plus a 7% payment in kind that would be raised to 9% after eighteen months.

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