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Altice France, led by Patrick Drahi, has negotiated a substantial debt restructuring deal with creditors holding over $25 billion in bonds and loans. This agreement aims to reduce the company's leverage and extend debt maturities. As part of the deal, senior secured creditors will receive a 31%equity stake, while junior debtholders will get 14%. The transaction will cut Altice's debt by approximately $9 billion and includes the appointment of two creditor-nominated directors to the board. This approach is a notable instance of complex out-of-court debt swap arrangements becoming popular in Europe, a strategy previously more common in the U.S.
The restructuring comes amid increasing competition in the telecom sector and rising costs, prompting Altice to seek financial stability. The deal and advisory roles involved Ropes & Gray, Lazard, Gibson Dunn, Rothschild, Milbank, and Houlihan Lokey. This move is expected to provide Altice with the financial flexibility needed to invest in network infrastructure and service enhancements.
This development underscores the challenges faced by telecom companies in managing substantial debt loads while striving to remain competitive in a rapidly evolving industry. The successful restructuring could serve as a model for other telecom firms seeking to balance financial obligations with growth initiatives.
