EMEA Restructuring: Altice France's €24bn restructuring
Creditors reverse charges
The biggest debt restructuring to complete in Europe, the Middle East and Africa during 2025 saw Altice France reduce its €24bn gross debts by nearly €9bn on October 1 after an 18-month period of uncertainty for the French telecoms company at the heart of entrepreneur Patrice Drahi’s empire.
In March 2024, Drahi had outlined a desire to take a knife to the company’s debts during a quarterly investor call that caught creditors unaware. Days before, the group had agreed the sale of its media business, giving Altice France bondholders hopes the proceeds could help repay them.
Instead, Drahi and his lieutenants, advised by Lazard, set out a plan to use aggressive tactics more commonly seen in US liability management exercises, where harsh terms are imposed on creditors. That caused the price of the debt to plunge by around 20 cents in the dollar during the call.
Rothschild, normally a debtor adviser, was well positioned to offer its services to creditors.
“We were hosting a wine-tasting event that evening in London for hedge funds and told them we were convinced creditors shouldn’t be scared by those manoeuvres as they would not work under French law,” said Arnaud Joubert, European co-head of restructuring at Rothschild.
That evening saw the basis of a cooperation agreement form among creditors, one of the first seen in Europe. It soon grew to 200 institutions covering €19bn of the debt, secured at the operating company level, and, remarkably, remained intact during the negotiations with the company.
Hedge funds involved included Elliott, Anchorage, Sona and Sculptor. Arini was a major holder of the holding company debt, which amounted to €4bn, and was advised by Houlihan Lokey. Altice is one of the mostly widely held credits in Europe, with Pimco and BlackRock holding major slugs too.
Rothschild’s original thesis that the US-style tactics could be resisted because French law offered protection against such measures proved correct. Initially there was little discussion between the two sides, as the company had sufficient cash to meet liabilities until the end of 2025.
However, the business was in decline operationally, forcing its owners to act pre-emptively if they were to retain control. Discussions started in November 2024 and it only took three months for an agreement to be reached, which saw creditors negotiate a better deal than first suggested to them.
At first, Drahi had offered creditors only a haircut and little equity in return. In the end they got 45% of the company. Importantly, the debt’s maturities have been extended by up to five years, giving Drahi time to entertain offers for the company so he can restructure his wider group.
“It was a win-win-win for the shareholders, company and lenders. Everyone knows this now gives time for the business to be sold,” said Joubert. “Now there is a two-year runway and it is less of a sinking ship.”