Europcar shares slump as ailing rental firm launches debt talks

Vantiva SA

08/09/2020 09:47

PARIS, Sept 8 (Reuters) - Shares in Europcar  EUCAR.PA 
tumbled 30% in early trading on Tuesday, after the car rental
group, battered by the coronavirus pandemic as travel dwindles
worldwide, said it aimed to try and restructure its debts. 
    Most companies exposed to the tourism sector and other
industries hit the hardest by the crisis made it through the
first few months of the pandemic, thanks in part to government
aid, such as state-backed loans. 
    But some are now reaching a crunch point which is forcing
them to address their debt piles. French steel pipe maker
Vallourec  VLLP.PA , which works with the energy and
construction sectors, said earlier this week it would hold talks
with all its banks and bondholders, while digital media company
Technicolor  TCH.PA  said it had reached an initial agreement to
trim its debt in June. 
    Loss-making Europcar said on Monday evening that it would
ask creditors to allow it to appoint an ad hoc representative as
part of the negotiations. Investment bank Rothschild and lawyers
Darrois Villey Maillot Brochier, Gide Loyrette Nouel et Kirkland
& Ellis are advising on the talks. 
    Europcar shares were down 30.5% at 0830 GMT. 
    Investment firm Eurazeo  EURA.PA , its main shareholder with
a 29.9% stake, had been exploring a sale of the company and had
asked potential bidders to submit offers by September, sources
close to the matter had told Reuters in July. 
    Germany's Volkswagen  VOWG_p.DE  had expressed interest in
buying back the rental group it had previously sold off in 2006,
but had yet to present a firm offer, the sources had said. 
    "The debt renegotiation announced yesterday evening is
raising fears of a capital hike further down the line that would
involve creditors taking equity," said one analyst, who declined
to be named. 
    Europcar said in its statement it was working on a
transformation plan to offer customers more digitalised
services, for example.   

 (Reporting by Sarah White, Blandine Henault, Gwenaelle Barzic,
editing by Louise Heavens)
 ((sarah.white1@thomsonreuters.com; + 33 (0) 1 49 49 56 85;))