SoLocal appointment triggers acceleration of PagesJaunes 8 7/8% notes

By Caroline Salls

Pittsburgh, June 23 – SoLocal Group said the appointment by the Commercial Court of Nanterre of Frederic Abitbol as a “mandataire ad hoc” constitutes an event of default under the 8 7/8% senior secured notes due 2018 issued by PagesJaunes Finance & Co. SCA and triggers an automatic acceleration of the notes.

According to a company news release, Abitbol was appointed to help SoLocal with discussions regarding a plan to “drastically reduce its financial debt.” The company said the appointment will allow it to obtain a balanced agreement as soon as possible, taking into account the interests of all stakeholders, including shareholders and creditors.

The company said PagesJaunes Finance is a vehicle without any equity-based relationship with SoLocal Group. In accordance with the law, the appointment of the mandataire ad hoc and the resulting acceleration of PagesJaunes Finance notes will have no effect on the maturity of SoLocal Group’s financial debt, which is not being accelerated.

As a result, SoLocal said it intends to propose through a consent solicitation that PagesJaunes Finance noteholders become direct lenders of SoLocal Group by appropriating an equal principal amount of the underlying loan held by PagesJaunes Finance against SoLocal Group, which has been pledged for the benefit of the noteholders.

The company said this will enable noteholders to participate directly in the discussions between SoLocal Group and its creditors.

As the ongoing debt restructuring process has extended beyond the initially expected timeframe, SoLocal said it is also unlikely to be in compliance with its bank covenants at the end of June and at the end of September, despite a favorable evolution of the group’s commercial performance since the beginning of 2016.

“The extremely significant amount of financial debt heavily constrains the group’s ability to invest to fuel the acceleration of its digital growth,” the release said.

“These elements, combined with the fact that the company’s ability to repay its financial debt at its contractual maturities of March and June 2018 is very unlikely, reinforce the need to drastically reduce its financial debt.”

SoLocal is a Boulogne-Billancourt, France, online communications company.

© 2015 Prospect News.
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