Altice: The negotiation between Drahi and its creditors blocked

According to a person familiar with the matter, “this is an attempt at extortion and blackmail, it is not in the interest of the company to divest itself of an asset”. In the coming weeks, lenders will open disputes, assures this same source. For Timothée Gagnepain, lawyer specializing in debt restructuring for the McDermott Will & Emery firm, “the funds want to maximize their profits and do not hesitate to go far and use the weapon of litigation”.

During the first round of discussions, each camp took a step towards the other. The lenders of the 20 billion euros of secured debt – that is to say guaranteed by assets – and Patrick Drahi had agreed on the principle of a payment of 2.6 billion euros and a debt reduction in exchange for shares. It remains to negotiate the amounts.

The boss of SFR – and 17^e professional fortune of France – said it was ready to immediately pay 2.6 billion euros in exchange for the cancellation of the old debt and the establishment of a new one, of 13.7 billion, at a rate average interest rate of 6.5%, and the shift in repayment deadlines to 2029 and 2031. That is, a two-year breathing space compared to current maturities. In return, the creditors could obtain 18% of the capital of Altice France.

In a counter-proposal, the latter, led by the firms Gibson, Dunn & Crutcher and Rothschild & Co, asked for more: a new debt of 14.4 billion euros, an interest rate of 7.5% and a increase in capital to 34%.

But the negotiations have not gone any further for the moment and Patrick Drahi preferred to transfer XpFibre out of their reach. “The discussions are extremely long because each creditor has divergent interests, no one bought the debt at the same price,” puts an investment banker into perspective. By provoking his creditors, Patrick Drahi could want to push them to resell their debts at a lower price and thus negotiate with new profiles.

The creditors of the secured debt have joined forces in a cooperation agreement, which allows them to speak with one voice. Nearly 95% of the creditors of the secured debt, or 18.5 billion euros of the 20 billion euros, have signed the agreement which runs until February 2026.

While waiting to find a deal, Patrick Drahi, advised by the Lazard bank, is rolling out his plan B, which will be applied if the billionaire and his lenders do not find a compromise. “XpFibre was placed in a basket on which the management of Altice France could raise new debt, explains a banker. This would have priority over the old debt. » Clearly, to repay his nearest due dates, Patrick Drahi could go into debt again, and create a new debt pyramid.

Timothée Gagnepain reminds us that in this negotiation, everyone plays their part. “There is a lot of bluffing, poker moves and an escalation in the manifestation of a balance of power but each camp has an interest in finding an agreement, everyone wants to save their skin and leave with as much money as possible, it It's a classic financial game. » With the first round of negotiations now closed, the poker game continues behind the scenes.