Feb 6, 2014
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Vivarte lenders appoint Houlihan Lokey

Feb 6, 2014

LONDON, England - Lenders to Vivarte have appointed financial advisory firm Houlihan Lokey after rejecting the French retailer's request to suspend loan covenant tests, banking sources said on Wednesday.

Kookai, a Vivarte brand

The move comes after a French court approved representative was appointed to mediate talks between Vivarte and its lenders. Vivarte failed to get agreement from two-thirds of its lenders to ignore a breach of its covenants and suspend further tests by a deadline of Jan. 22

Law firm Willkie Farr & Gallagher has also been appointed to advise non-consenting lenders, the sources said.

A lender meeting is due to take place on Feb. 11 to discuss possible options to resolve the stalemate, the sources added.

Houlihan declined to comment. Willkie Farr and Vivarte were not immediately available to comment.

Private equity firm Charterhouse, bought Vivarte in 2007, backed by 3.43 billion euros ($4.68 billion) of leveraged loans, but has struggled to manage its debt in an unfavourable economic and consumer environment in France.

Vivarte asked lenders to suspend its covenant tests in a 'covenant holiday' in December to buy time to implement plans that would improve its business trading performance.

Vivarte's loans have fallen on Europe's secondary loan market as lenders sell out of the debt to avoid potential losses.

Vivarte's unextended term loans were quoted at 75.25 percent of face value on Wednesday, over 10 points lower than 85.6 on January 1, according to Thomson Reuters LPC data.

An extended term loan was quoted at 74.96 on Wednesday, from 83 on January 1, the data shows.

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