Winding Up — Black Friday rush

Will Macadam

29 November 2024•7 min read

Winding Up is 9fin's weekly newsletter, incorporating summaries and commentary from our European distressed coverage for the past week. Find out more about what we do for distressed here.

Turkey day has come and gone. We’ve waded into the depths of pre-Christmas sales season now and while it would be hyperbole to say that Black Friday has seen a flurry of new activity (certainly not a much greater volume) in the distressed space, it feels like everyone’s getting their ducks in a row for the new year.

Just in the space of this month, we’ve seen legal and financial advisors nab mandates on company and creditor side for refi discussions concerning: Norway-based Prosafe, German auto parts manufacturer Standard Profil, German lighting manufacturer SLV, Swiss vending machine company Selecta, and Austrian motorcycle manufacturer KTM.

There have also been company-side advisory appointments for British restaurant chain (and record label) Pizza Express and German omni-channel retailer HSE24.

Looking for a main trend, it is clear that Germany continues to provide a lot of volume in the European distressed market. The pain has been felt far and wide, German companies in the Fortune 500 Europe has shedded over 60,000 jobs this year, according to a Fortune report.

Even German icons like Volkswagen have made tentative plans to shut down three of their factories, putting tens of thousands of jobs at risk. But Volkswagen is not the only OEM weighing up cuts: Ford has cut 4,000 jobs across Europe (mainly in Germany and the UK) and Stellantis has decided shutter its UK van factory — cutting 1,100 jobs.

But the sick man of Europe this week seemed to be France, where borrowing costs were higher than those of Greece due the risk of a government crisis over its budget. Supermarket chain Auchan (it’s parent Elo can be found here) has announced that it will cut more than 2,300 staff, according to a report from trade publication Retail Detail. French tyre manufacturer Michelin has announced its intention to close down two manufacturing sites by early 2026, putting more than 1,200 jobs at risk.

Given the buzz around Trump 2.0 and the incoming US president’s favourite “T” word, the pain felt by the German automotive industry and other European OEMs and their suppliers could just be beginning.

Anyway, onto this week’s news…

This week’s news

Altice International — After selling its AdTech business, Teads, earlier this year, the telco announced its agreed a disposal of Geodesia construction activities in Germany to a related party of the group. At the same time management confirmed the group’s infrastructure, data centres, and real estate in Portugal remain up for sale. Find more in 9fin’s earnings review here.

Canary Wharf — The London real estate group outlined its refinancing plan, which include raising £610m against unencumbered retail malls and using the proceeds to repay £600m worth of 2025 sterling and 2026 euro notes. 9fin’s Hazik Siddiqui breaks down the refi plan here.

Emeria — 9fin’s Hazik Siddiqui takes stock of French real estate service firm’s financial condition, as Emeria is on-track to exhaust its €407.5m RCF in the first half of 2025. Read more here.

Hunkemoller — A group of funds has filed a lawsuit in New York against Dutch lingerie maker Hunkemoller and US fund Redwood for an uptiering transaction that occurred in June, according to a complaint filed on Tuesday (26 November). 9fin reported in July that the funds retained Pallas Partners with the intention to litigate against the deal.

Hurtigruten — A group of creditors to the Norwegian cruise operator are set to recapitalise and assume control of the business, which is backed by private equity firm TDR Capital. The group will be split into two standalone entities and will secure more than €500m of new capital.

Idorsia — The Swiss biopharmaceutical company has restarted negotiations with its convertible bondholders as it is expected to run out of cash by year end with a maturity fast approaching in January, sources close told 9fin.

Isabel Marant — The French luxury fashion brands €265m SSNs traded down nine points on its Q3 24 earnings release this week. Management announced its forward order book for its spring / summer 2025 season was down 21%. This confirms the credit is likely to continue suffering throughout 2025. Find more in 9fin’s earnings review here.

Northvolt — The Nordic battery manufacturer has replaced Rothschild with Houlihan Lokey as its financial advisor, 9fin sources said confirming a first report from Bloomberg.

Lowell — The UK debt purchaser focused on strong operational performance during its Q3 24 investor call. It also confirmed engagements with bondholders regarding potential solutions to its distressed capital structure. Find more in 9fin’s earnings review here.

Pizza Express — The UK pizza chain confirmed PJT Partners capital markets team is advising on the refinancing of its £335m SSNs due 2026, but with a poor earnings outlook and the notes yielding 17.4% it remains 9fin’s view that absent an equity injection a smooth market refi is not possible. Find more in 9fin’s earnings review here.

Pro-Gest - The Italian paper and packaging firm shared its industrial plan with creditors, which includes operational and financial projections as well as asset disposal and footprint consolidation initiatives. A restructuring proposal is expected to follow in the next two weeks.

R-Logitech — the sea port terminal operator has launched a €13m senior zero coupon note to allow its bondholders to indirectly invest in a new €20m loan as its restructuring process hits a roadblock. A source close to the bondholders said they have not heard of any noteholders participating in the new notes given “uncertainty is quite high”.

Tropicana — The beverage company has drawn on a $56.5m loan, with a four-month maturity, provided by its sponsor PAI Partners, according to 9fin sources. Tropicana is struggling with a decline in sales and gross margin, it burned about $26m in cash during its third quarter — which was mostly offset by an $24m asset disposal.

Varta — The majority of German car battery manufacturer’s creditors have approved its restructuring plan at a meeting in Stuttgart today (25 November), according to a company release. Only a group of free float shareholder voted against the plan, who can be crammed down under the StaRUG process.

Victoria plc — The UK flooring manufacturing posted weak H1 25 results showing volume deterioration in three out of four segments. Key credit metrics weakened YoY including net leverage to 9.8x in H1 25 from 7x in FY 24. Hence deleveraging becomes a priority ahead of the next round of refinancing. The company is on track to deliver on its guidance and is not in a hurry to refi its cap stack unless is sees more attractive terms.