Vivarte in talks to reset loan agreements
Vivarte, a French clothing retailer had been talking to lenders about a potential recalculation of its loan agreements to make its EUR2 billion debt pile easier to manage. This was according to banking sources who told Reuters on Friday.
Last May, Vivarte had breached leverage and interest agreements on its loans. The retailer is owned by private equity firm Charterhouse. According to Vivarte, the company had been hit by unfavorable economic and consumer conditions in France. The conditions were even worsened by weather conditions, said Vivarte.
The French clothing retailer had also breached August's covenant tests, said investors. However, lenders were confident that a long term solution could be found. Vivarte had around USD600 million of cash on its balance sheet and did not require a full debt restructuring. This was after the company had been found to be able to meet debt repayments for the next three years.
According to a Vivarte investor, "Vivarte is expected to have breached covenants again and we are prepared to enter talks with the company around this.
Vivarte refused to comment on the agreement reset.