Monier Lenders Expect Signed Rescue Deal Thurs-Source-Source

LONDON (Dow Jones)--Monier Group creditors still expect a rescue package for the struggling roofing company to be signed Thursday, despite last-minute attempts by junior lenders to derail the process, a person familiar with the situation said Tuesday.
Some 78% of the company's senior lenders have agreed to waive Monier's interest payment due Tuesday and are now just "finalizing documents" the person added. The company has already backed the lender-led proposal and is expected to approve the deal.
Monier's senior lenders are working with a group of investors of distressed assets, including Apollo Management, TowerBrook Capital and York Capital. It involves a new cash injection of EUR150 million through a committed and underwritten senior secured credit facility and an additional EUR50 million available on an uncommitted basis. A further EUR50 million will be available on a non-committed basis to finance asset sales and leasebacks.
The restructuring would halve Monier's debt to around EUR1 billion, comprising EUR700 million senior debt and a EUR300 million PIK, or payment in kind. First-lien lenders would be offered a share in the new money on a pro-rata basis.
The deal will put the lenders in full control of the debt-laden company via a debt-for-equity swap, squeezing out buyout shop PAI Partners, which bought the former Lafarge Roofing business for EUR2.4 billion in February.
It will also marginalize junior debt holders who Friday launched a last-minute attempt to derail the rescue plan, people said. The junior debt holders sent a letter to Monier's lending syndicate saying the senior lenders' proposal had "severe flaws," in particular the level of debt that will remain on Monier's balance sheet after the restructuring, press reports have said.
The senior-lien lenders are still in discussions with the second-lien holders but are confident that the deal won't be held up by their intervention, one person said.
Paris-based PAI has made various offers to inject cash into the company, but these have been rejected mainly because they involved PAI hanging on to a significant stake in Monier while the lenders were after full control, people said. The private equity firm is now resigned to losing the company if the lenders deal is agreed, one person said.
This is just the latest example of lenders moving in to take control of debt-laden companies acquired by buyout shops during the boom and funded with massive amounts of debt. Many of these companies are now struggling amid treacherous trading conditions and are perilously close to breaching banking covenants.
By Marietta Cauchi Of DOW JONES NEWSWIRES