(Bloomberg) — Lenders including Pemberton Asset Management, Blue Owl Capital Inc. and Hayfin Capital Management are taking over struggling telecoms supplier Netceed through a debt-for-equity swap.
All of the creditors agreed to write off some of their debt in exchange for ownership stakes in the company, people with knowledge of the matter said, speaking on the condition of anonymity. Netceed, which is controlled by private equity firm Cinven, will also gain access to €70 million ($81.2 million) of liquidity as part of the agreement, providing it with a cash buffer, the people said.
The $1.7 trillion private credit market has seen an increase in debt-for-equity swaps in recent years as elevated interest rates strained some corporate balance sheets. This deal is one of the largest debt-for-equity swaps for European private credit lenders to date, according to a Bloomberg News analysis. Netceed’s debt structure includes over $1 billion of term loans, according to data compiled by Bloomberg. Much of that is held by private credit lenders, the people said.
A spokesperson for Pemberton said that the new agreement “underlines our belief in Netceed as we support the business to deliver its long-term, sustainable growth strategy.”
Representatives for Netceed, Hayfin and Blue Owl declined to comment.
Netceed has been grappling with deteriorating finances partly due to lower demand from its clients Altice USA and Altice France, which have been struggling with their own debt piles.
In April, Netceed struck an agreement to access over $150 million of liquidity for operations. The deal also included waivers and amendments to the existing debt documents, paving the way for Netceed to raise a further $150 million if needed.
That granted the company some breathing room while it negotiated a longer-term solution for its capital structure. CVC Credit Partners and Permira Credit were also among the creditors involved in the talks, Bloomberg previously reported.
–With assistance from Luca Casiraghi.
(Updates with details on creditors in final paragraph.)
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