Altice SFR - comment

Our initial view is the differences between the Company and Ad-hoc proposals are not that far apart (details below) and a deal should be achievable. Altice SFR France has released a cleansing statement following the conclusion of negotiations between the ad-hoc Secured Holders and the Company.  The negotiations have ended without agreement and any further proposals will be subject to further discussions. The Company wishes to write off 16.5% for 18% equity stake, with the counter from lenders a write off of 13% for 34% equity stake.  

The Company’s proposal concerning the Senior Debt was for a 13.3% cash paydown, 70.2% of new debt extended to 2029-31 with a weighted average coupon of 6.5%, with the balance of 16.5%, converted into an 18% equity stake.  

The ad-hoc counter-proposal was for the same cash paydown (13.3%), 73.7% in restated debt (an additional €700m) with a 1% higher coupon (7.5%) and the balance of 13% converted into either 34% equity stake or c. €2bn of preferred equity which converts into 20% equity at the holders' discretion.  

The Company had also issued a proposal for the Unsecured Notes, with €215m of cash (5%), and €645m (15%) of new unsecured notes which will be subordinated to the Senior Debt proposed offering.   This combined is 20% of recovery, with the subordinated holders offered some common equity participation, to be determined.  

Additionally, the Company disclosed expected EBITDA for FY24 is c. €3.35bn, with c. €900m of the RCF drawn at year-end. Also, the Company disclosed that XPFibre is now held by a lateral affiliate of the Company, which is not part of the restricted Group, Altice France Holding SA nor a subsidiary of Altice France Holding SA.