PARIS (Reuters) - Car rental firm Europcar, which has been walloped by the coronavirus pandemic along with the travel sector, said on Thursday its creditors had agreed to shrink its debt load by 1.1 billion euros in exchange for shares and control of the firm.
The loss-making French company will receive around 500 million euros ($595 million) in funding as part of the restructuring, to help with cash flow and finance its car fleet, part of which will come from a capital hike.
Investment funds Anchorage, Attestor, Diameter, King Street Capital and Marathon, which in recent months had bought up the Europcar bonds that will be converted into capital, will receive shares in exchange.
As part of the deal, which will help the group shrink its gross debt from just over 2 billion euros now, the funds will hold between around 90% and 97% of Europcar once the debt-to-equity swap and capital hike is finalised.
Eurazeo (PA:EURA), which holds 29.9% of Europcar and which will now see its holding squeezed, gave its backing to the transaction, the company said. The French investment firm had been hoping to find buyers for its stake.
German carmaker Volkswagen (DE:VOWG_p) had circled Europcar back in June and had begun talks over a possible acquisition of the firm, sources told Reuters at the firm, but a firm bid never materialised.