Yahoo Finance Pro-Gest Talks to Carlyle, Cheyne to Extend Debt and Get Funds
(Bloomberg) -- Pro-Gest SpA’s talks with creditors including Carlyle Group Inc. and Cheyne Capital are intensifying as the Italian packaging company seeks to manage looming debt maturities and raise new funds.
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Negotiations have picked up pace after a group of holders of €250 million ($268 million) public, junk-rated bonds due in December signed a non-disclosure agreement, which means they can no longer trade the notes and typically heralds more in-depth negotiations, according to people familiar with the matter.
The revamp of the cardboard and paper producer’s debt stack will require approval from holders of the firm’s private and public notes, though both groups are working on their own proposals, said some of the people, who spoke on condition of anonymity because the details aren’t public.
Spokespeople for Carlyle, Cheyne and Pro-Gest declined to comment.
Carlyle, which already holds about €200 million of privately placed bonds, is offering fresh financing, and would also consent to extending the maturity of the existing notes beyond 2025, some of the people said.
Public bondholders would need to agree, according to some of the people. They’d also have to accept a maturity extension on the debt they hold, as well as a potential haircut, they said.
Alternative Plans
One alternative for the group holding public notes — which includes Cheyne Capital — is an injection of new money from them to fund the company’s business plan, the people said.
That could involve the investors providing enough cash to redeem Carlyle’s debt, those people said. With the private bonds out of the way, Cheyne and others could get more assets pledged as collateral against their own notes, they added.
Pro-Gest’s bonds are currently quoted at about 42 cents on the euro, according to pricing compiled by Bloomberg.
The company, owned by the Zago family, recently reshuffled its board of directors. In March, Sergio Iasi was appointed chief restructuring officer. On Tuesday, the company announced its board would delay the approval of its annual results due to the ongoing discussions with creditors.
--With assistance from Luca Casiraghi.
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