The founder of the group, Gérard Brémond, should lose the management of the company, entrusted to three investors.
(AFP / ERIC PIERMONT)
Very affected by the health crisis and weighed down by massive debt, the European number one in Pierre et Vacances leisure residences is moving towards an agreement entrusting its fate to three investors who will delight its founder, Gérard Brémond , group control.
On Monday, December 20, the company, which has 12,000 employees and owns the Pierre et Vacances, Center Parcs, Maeva and Adagio brands, announced that it had entered into an exclusive negotiation agreement until January 31 with a consortium of investors made up of its creditors Alcentra and Fidera and its lessor Atream, for a recapitalization and a major debt conversion.
The operation, which has received an agreement in principle from the main financial creditors, provides for an injection of 200 million euros of equity through two capital increases, one of which, of 150 million, reserved for the consortium, and a “deleveraging massive “via the conversion into capital of more than” 551 million euros of debt “, in the coming months.
677 million euros in losses over the last two years
The capital of the company would be upset at the end of the operation: the current shareholders would hold only “2.1% to 16.4%” of the capital, while the investors would rise “between 42.6% and 56%. , 8% “, excluding shareholding in respect of their existing or acquired receivables.
Listed on the stock exchange since 1999, the group which has been in deficit for ten years urgently needed new capital. It has accumulated 677 million euros in losses over its last two years, the Covid-19 pandemic having greatly reduced its activity and increased its net debt to 530 million euros, with a gross debt of 1.1 billion euros. It includes a State guaranteed loan of 240 million euros obtained in June 2020, repayable over 5 to 6 years.
This agreement and the various operations on the capital that it involves will be submitted to the vote of a dedicated general meeting of shareholders, which will be convened subsequently at the group’s annual general meeting, scheduled for February 10.
Gérard Brémond employee of the group
In the proposed transaction, Gérard Brémond, founder of the group and who still owns 49.6% of the capital via the family holding company Siti, would become an employee of one of the entities of Pierre et Vacances-Center Parcs, with “the mission of supporting the group in its transition “, that is until the summer of 2022 if the agreement is finalized, specified a spokesperson. As such, he would benefit from the allocation of free preference shares convertible into ordinary shares.
Gérard Brémond would then become a service provider for Pierre and Vacances-Center Parcs, becoming a shareholder “up to 70% of the capital” of a real estate company to be created, in which Atream and the group would each hold 15%. This company would provide services such as asset management on behalf of a real estate company (which also remains to be created) with the aim of acquiring and renting future residences to the group.
54 years at the head of the group
With Pierre et Vacances, Gérard Brémond had invented the concept of the “new property”: individuals buy apartments at good prices which they entrust to him for rent, while reserving residence rights. A concept applied “to the sea and the mountains”, in Les Ménuires, Val d’Isère, Juan-les-Pins or Sainte-Maxime. He bought Center Parcs in 2003.
After having presided over the destinies of his group for 54 years and seen five general managers in 15 years, Gérard Brémond will therefore have to hand over. The operation, subject to conditions precedent – subject to the Autorité des marchés financiers allowing an exemption from the obligation to file a mandatory public offer, in particular – provides for new governance, with a board of directors of “8 or 9 members “chaired by Franck Gervais, the current managing director.
Since February, as part of a conciliation procedure, the group has obtained new bridging financing of € 300 million from its partners and concluded an agreement with its institutional donors and around 80% of its individual owners, holders of ‘apartments in Pierre et Vacances or Center Parcs, in particular relating to the abandonment of 5 months of rent during the crisis.