French distribution group Vivarte is set to complete its financial restructuring in on 29 October with a debt-for-equity swap, the group announced on Wednesday.

To clean up its colossal debt (2.8 billion euros), Vivarte had to finalise an agreement with its creditors at the end of July that will transform the biggest part of its debt into capital, to the benefit of the group’s main creditors.

Vivarte brings together 16 brands, including La Halle, André, Naf Naf, Minelli, San Marina, Kookaï, Caroll, Pataugas...

Ads

The group’s debt will thus drop from 2.8 billion euros to 800 million euros.

The financial rescue of Vivarte also includes the injection of an additional 500 million euros by lenders, and "in particular" by a group of 11 funds which have guaranteed the contribution and which will be united in this commitment.

There is thus no suspense on the issue of where the 500 million euros comes from.

Formally, this final stage in the restructuring starts this Wednesday and ends on 29 October.

Completed with the assistance of the Paris Commercial Court, the Vivarte financial restructuring operation will result in a change in shareholders and in the method of governance: previously held by investment funds Charterhouse, Chequers and Sagard, Vivarte’s shareholders will now be lenders Oaktree, Alcentra, GoldenTree and Babson.

These four lenders will constitute and sit on the future board of directors, which will consist of some ten members.

Vivarte’s President, Marc Lelandais, "congratulates himself on such an outcome for the group and its employees. Vivarte has finally found a healthier financial situation and is starting on a new stage in its development, thanks to this unprecedented restructuring in Europe, both by its scope and its complexity."

The group became heavily indebted before the start of the financial crisis, following its purchase by LBO in 2007 by Charterhouse, Chequers and Sagard investment funds.

Its debt was one of the highest on the European level and the group, whose activity was suffering from competition with the international textile giants (H&M, Zara, Primark...), was no longer able to meet its maturities.

Formerly the André group, Vivarte employs 22,000 people and has 4,500 retail outlets, for an annual turnover of around 3 billion euros.

Under the presidency of Marc Lelandais, the group is looking to branch out internationally and to develop its online sales.