Leading European private equity group seeks to renegotiate loans for two companies it bought during the boom, which are focused on the construction and housing sectors.
According to an article in the Financial Times, Paris-based PAI Partners has appointed advisers to carry out the negotiations with the lending banks.
Rothschild has been brought in to advise on €496m of loans for house builder, Kaufman & Broad, which are mainly held by Calyon and Merrill Lynch.
Goldman Sachs has been hired to advise on the debt restructuring of Monier, a former Lafarge owned roofing business, which owes €2bn to over 100 lenders. A steering committee is being established to handle the talks..
The two companies are apparently close to breaching their banking covenants as the down turn bites into the housing market.
Analysts foresee many more such renegotiations over the coming one to two years as private equities groups grapple with the downturn hitting the companies they have invested in.
Source: Thomson Merger News