Orpea - comment

Dorian Lowell from Gleacher Shacklock held an open conference call yesterday discussing alternative options to the current Orpea restructuring proposal. This is part of the Unsecured Creditors Negotiating Group (UCNG) and ultimately they are trying to convince unsecured creditors not to sign the Lock-up Agreement in order to be able to continue to negotiate with the Company. They are in discussions with the Concert’O group, a Group primarily made up of Schuldshein lenders. This is likely to be the same Group of 10 Chinese and German banks who are threatening litigation in France.

The UCNG Group claim to represent c.€590m of unsecured debt, €150m or 36% of the OCEANE convertible bonds. The Concert’O Group, coupled with another Schuldshein Group, hold c.€900m of unsecured debt, or 24% of the overall total of unsecured debt. In conjunction with the UCNG Group, the holdings increase to €1.5bn or 40% of the unsecured debt, which has the potential to block a 2/3rd affirmative vote.

Alternative proposals were not fully explored but in essence, the Group would seek to reopen the terms of the SteerCo/Company proposal in order to provide more of the fresh equity required (to the detriment of the CDC’s fresh equity) and provide a better alternative to institutions who can’t hold equity directly.

However, timing is not on anyone’s side - The Conciliation Process has been extended for the last time to 25th March 2023. And more importantly, the Company’s liquidity remains tight.