Hurdles for Altice France: No Agreement on Debt Restructuring

Negotiations between Altice France and a group of secured creditors regarding the restructuring of the massive debt burden of 24.4 billion euros concluded the first round of discussions without reaching an agreement. The financially troubled French telecommunications company and its steering committee of creditors are seeking ways to reduce the company's debt. Some critical points in these negotiations concerned the interest costs and the amount of equity that billionaire and company owner Patrick Drahi should allocate to the creditors. Altice proposed converting its secured debt into a cash payment of 2.6 billion euros, new secured debt securities totaling 13.7 billion euros with maturities from 2029 to 2031, as well as an 18% equity share. These debts should have a weighted average interest rate of 6.5%. The creditors, on the other hand, demanded the same cash payment, but secured debt amounting to 14.4 billion euros with an average interest rate of 7.5% and a 34% equity share. Among other economically relevant proposals, the discussions also involved governance rights, improved document conditions, and additional securities. For unsecured creditors, the company plans a recovery of 20%, which should include a cash payment, new unsecured debt securities, and equity shares yet to be determined. Altice France had already indicated to its creditors in March that write-downs are necessary to reduce the debt to below four times the revenue, from currently more than six times. Of the total 20.2 billion euros in secured debt, the remainder was classified as unsecured. To alleviate financial liabilities, Altice plans to sell assets. Notably, its stake in the French cable company XpFibre is a key point, with recent disclosures indicating that this stake is being held out of creditors' reach.