Debt accord set to ease European Directories deal
£1.7bn restructuring will see banks write-off 80 per cent of what phone book publisher owes
Sunday 19 September 2010
Creditors are putting the finishing touches to a €2bn (£1.7bn) restructuring of publishing company European Directories in a deal which will see 80 per sent of debt written off.
The company, the pan-continental equivalent of Yellow Pages, is expected to confirm by the end of this month that it has agreed with its creditor committee to carry out a "pre-pack" administration process. This controversial process involves lining up a buyer, which could be existing management, and then being placed in administration only to be bought out free of some or all of its debts. As part of the agreement, a new vehicle will be set up and the assets of European Directories will be transferred.
The senior lenders consortium which has almost 20 parties and is led by the Royal Bank of Scotland, which inherited its stake in the takeover of ABN Amro in 2007, and Lloyds Banking Group, is owed around €400m. It will take a partial debt-for-equity stake in the new vehicle. It will also further write down the outstanding debt which will be held in the new vehicle.
The junior creditors and the lead financier, Macquarie Capital, have agreed to write off €1.6bn of the debt. They will not hold any equity or debt position in the reorganised company. The accountancy firm PricewaterhouseCoopers is thought to have been lined up to act as administrator and implement the pre-pack deal.
European Directories, which is advised by lawyer Kirkland & Ellis, will continue to operate as normal during the implementation of the restructuring, which was originally due to have been completed by June.
The company was founded in Amsterdam and was taken over in a €1.8bn buy-out in 2005 by Macquarie Capital, part of the Macquarie Group, which then purchased other directory businesses across Europe. Today, European Directories has operations in Finland, Denmark, Austria, Sweden, the Czech Republic, Slovakia, Poland and Gibraltar. It employs 4,750 people and has more than 700,000 customers.
It is not an integrated brand business, with the day-to-day operations conducted at a country level by the various operating companies running under different names. Information is provided via print, online, telephone and mobile technology. Key initiatives are co-ordinated from the head office in London.
The restructuring has been agreed after a lengthy and complicated negotiation process, part of which was determining whether to adopt the Dutch or English pre-pack process. But as the company's "centre of main interest" was defined as being in the UK the creditor committee has decided to use the UK's more flexible pre-pack process.
Finalisation of the restructuring will be good news for the company which is operating in an increasingly competitive marketplace. Directory service publishers are facing challenges from falling advertising revenue, online competition and adapting their businesses to changing consumer behaviour. Many directory services groups also amassed sizeable debt before the credit crunch hit. In the UK, Yell Group, publisher of the Yellow Pages, carried out a £660m rights issue and secured an agreement from its lenders to extend debt repayments to 2014.
All European Directories parties declined to comment.
- 1 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 5 This crazy skiing video will leave you feeling queasy
Paris attacks: Do not call Charlie Hebdo killers 'terrorists', BBC says
Rowan Atkinson to sell £10 million McLaren 'supercar' he crashed into a tree and a lamppost
UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Warriors in ancient Iraq suffered Post-Traumatic Stress Disorder more than 3,000 years ago, say researchers
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
British Muslim school children suffering a backlash of abuse following Paris attacks
Greece elections: Syriza and EU on collision course after election win for left-wing party
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...