Europcar Mobility Group SA announced Feb. 26 that it completed a debt restructuring that will see lenders Anchorage Capital Group and Marathon Asset Management, among others, become new owners of the France-based car rental group.
The completion of the transaction comes after the company on Feb. 3 obtained approval from the Paris Commercial Court for its restructuring that was implemented via an accelerated timetable under the "procédure de sauvegarde financière accélérée" of the French insolvency code. It requested the opening of the procedure in December 2020 to reduce debt as the group came under pressure following falling revenue due to COVID-19.
Europcar reached an agreement in principle on the debt restructuring — which is a debt-for-equity swap — with creditors on Nov. 26, 2020. The deal includes €475 million of new money and a debt reduction of €1.1 billion by fully converting the borrower's existing unsecured €600 million of 4.125% notes due 2024, the €450 million of 4% notes due 2026 and the €50 million Credit Suisse facility into equity.
Bondholders Anchorage Capital Group and Marathon Asset Management will become the largest shareholders with 24.45% and a 13.12% shares in the group, respectively, while investors Attestor Ltd., Diameter Capital Partners and King Street Capital Management will also take equity stakes, ousting previous shareholder Eurazeo, which held 29.9% of Europcar prior to the restructuring.
Existing creditors have backstopped €250 million of new-money equity, which was raised via a €50 million rights issue and a €200 million share capital increase. In addition, the bondholders have backstopped €225 million of new money for a new revolving fleet financing due December 2024.
Creditors have refinanced the existing €670 million revolving credit facility, or RCF, via issuance of a new €170 million RCF and a new €500 million term loan facility due June 2023. The company expects to draw roughly €133 million of the new RCF.
Roughly €285 million of state-guaranteed loans that Europcar received earlier this year will remain in place, leaving total drawn debt of €918 million post-restructuring, down from €2.018 billion currently.
The company started restructuring discussions with creditors in September 2020, amid squeezed revenue due to travel disruption caused by COVID-19. The group had hired Rothschild & Co. as financial adviser and Darrois Villey Maillot Brochier, Gide Loyrette Nouel and Kirkland & Ellis as legal advisers.